Allocative Efficiency Is Achieved When the Marginal Benefit of a Good

question 96

Multiple Choice

Allocative efficiency is achieved when the marginal benefit of a good

• A) exceeds the marginal cost by as much as possible.
• B) exceeds the marginal cost, but not by as much as possible.
• C) is less than the marginal cost.
• D) equals the marginal cost.
• E) equals zero.

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Definitions:

Fixed Tariff

A preset tax or duty to be paid on particular imports or exports, which remains unchanged over a period regardless of economic conditions.

Ad Valorem Tariff

A type of tax calculated as a percentage of the value of the goods being imported or exported.