Efficiency Is Reached by Allocating Resources to Those Who Have

question 42

Multiple Choice

Efficiency is reached by allocating resources to those who have the greatest willingness to pay for them.This can be achieved in a market where a negative externality is present by:

• A) taxing consumers.
• B) giving consumers a subsidy.
• C) place a quota at the efficient level.
• D) All of these will achieve efficiency.

---

Definitions:

Production Possibilities Frontier

A curve depicting the maximum viable combination of two products that can be produced in an economy, assuming all resources are fully and efficiently utilized.

Economize

To reduce expenses or to use resources carefully and efficiently to reduce waste and save money.

Full Production

The level of production where a company uses all its resources efficiently.

Unemployment Rate

The part of the labor force that is without employment but is actively interested in finding a job.