Allocative Efficiency Occurs When

question 13

Multiple Choice

Allocative efficiency occurs when:

• A)marginal social utility equals marginal social cost.
• B)all industries are monopolized.
• C)all externalities are eliminated.
• D)marginal social cost equals the minimum of average social cost.
• E)marginal social cost equals average social cost, though not necessarily at the minimum of average social cost.

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Definitions:

Frequency Theory

A theory in the field of psychology that suggests the rate at which nerve impulses are fired in the auditory nerve corresponds to the frequency of a sound wave, enabling us to detect its pitch.

Volley Principle

A theory in auditory neuroscience suggesting that groups of neurons can provide a temporal coding for frequencies by firing in rapid succession, allowing the brain to perceive sounds up to about 5000 Hz.

Binaural Cues

Sounds that enable the brain to perceive direction and distance by comparing the input from both ears.

Interposition

A visual cue in which one object partly blocks another, suggesting that the blocking object is closer to the observer.