An Economy Will Be Allocatively Efficient If

question 77

Multiple Choice

An economy will be allocatively efficient if

• A)least-cost production techniques are employed by all firms.
• B)the marginal costs of all firms in an industry are equal.
• C)marginal cost equals price for all goods.
• D)the economy's resources are fully employed.
• E)imperfectly competitive markets are regulated.

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Definitions:

Stock C

A generic term that could refer to a third class of stock; however, without specific context, its meaning can vary.

Arbitrage Pricing Theory

A theory that designs to predict the price of assets by considering the relationship between a financial asset's returns and the macroeconomic factors that directly affect it.

Expected Return

The anticipated value or profit generated by an investment over a given period, factoring in all potential outcomes and their probabilities.

Systematic Risk

The danger that affects all investments within an entire market or a specific sector, commonly referred to as market risk or non-diversifiable risk.