What Does Allocative Efficiency Mean

question 5

Multiple Choice

What does allocative efficiency mean?

• A)That a product is produced where its price is equal to its marginal costs.
• B)That a product is produced where its price is below its marginal costs.
• C)That a product is produced where its price is equal to its average costs.
• D)That a product is produced where its price is below its average costs.

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Definitions:

Labor Force

The total number of people available to work, including both the employed and the unemployed who are seeking employment.

General Price Level

An overall measure of the cost of goods and services in an economy at a specific time.

Macroeconomics

The branch of economics that studies the behavior and performance of an economy as a whole, focusing on aggregate changes.

Individual Units

Individual units refer to the single, distinct items or entities that can be counted or measured, often used in reference to products or components in economics and various sciences.