An Economy Is Operating with Optimum Efficiency If

question 126

Multiple Choice

An economy is operating with optimum efficiency if

• A)the price of the product is greater than marginal cost.
• B)the production of more of commodity A entails the production of less of commodity B.
• C)marginal cost of output is greater than marginal utility of output.
• D)an increase in output would result in a decrease in average cost per unit.

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Definitions:

Residual Dividend Approach

Policy where a firm pays dividends only after meeting its investment needs while maintaining a desired debt–equity ratio.

Debt-Equity Ratio

A financial metric showing the mix of debt and equity used by a company to support its assets.

Investment Needs

The required capital an individual or organization needs to achieve financial goals.