Allocative Efficiency Occurs When

question 5

Multiple Choice

Allocative efficiency occurs when

• A)producer surplus is maximized.
• B)consumer surplus is maximized.
• C)the sum of consumer and producer surplus is maximized.
• D)the economy achieves the frontier of the production possibilities boundary.
• E)deadweight loss is achieved.

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Definitions:

Capital Employed

The total amount of capital used for the acquisition of profits by a firm or project, including assets and working capital.

Debt

An obligation owed by one party to a second party; in financial terms, it typically refers to money borrowed by one party from another.

Capital Employed

Capital employed refers to the total amount of capital used for the acquisition of profits by a firm or project. It is typically the value of all assets employed in a business.

ROCE

Return on Capital Employed; a financial ratio that measures a company's profitability and the efficiency with which its capital is employed.