Allocative Efficiency Means That

question 145

Multiple Choice

Allocative efficiency means that

• A) the product is produced at the lowest unit-cost possible.
• B) society's scarce resources are used to produce products that align with consumer preferences.
• C) the product is sold at a price equal to the average cost of producing it.
• D) the marginal benefit of the product exceeds its marginal cost.

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Definitions:

Capital Gains Yield

reflects the price appreciation of a security or an investment, showing the percentage increase in the investment's value over a period.

Deviations

Instances of departing from an established course or accepted standard.

Average Return

The sum of returns accrued over a period divided by the number of periods to assess investment performance.

Volatility

A statistical measure of the dispersion of returns for a given security or market index, indicating how much and how quickly the value of an investment, market, or market sector changes.