Technological Advance Improves Allocative Efficiency by

question 50

Multiple Choice

Technological advance improves allocative efficiency by

• A)enhancing monopoly power.
• B)reducing income inequality.
• C)giving society a more-preferred mix of goods and services.
• D)encouraging saving.

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Definitions:

Break-Even Point

The level of production or volume of sales at which total costs and total revenue are equal, resulting in no net loss or gain.

Variable Expenses

Variable expenses fluctuate with business activity levels, such as materials and labor costs, which increase as production increases.

Fixed Expenses

Costs that do not vary with changes in production volume or sales, such as rent, salaries, and insurance.

Profit

The financial gain realized when the revenue generated from a business activity exceeds the costs, expenses, and taxes needed to sustain the activity.