Which One of the Following Conditions Is Required for Allocative

question 18

Multiple Choice

Which one of the following conditions is required for allocative efficiency?

• A)Marginal revenue product exceeds the value of marginal product by the greatest amount
• B)Marginal revenue product equals the wage rate
• C)Value of marginal product equals the marginal wage cost
• D)Value of marginal product is the same in all alternative employments of a given type of labor

---

Definitions:

Amortization Schedule

An Amortization Schedule is a table detailing each periodic payment on an amortizing loan, including the amount of principal and the amount of interest that comprises each payment until the loan is paid off at the end of its term.

Bond Carrying Amount

The net value of a bond on a balance sheet, which may differ from its face value due to amortization or market changes.

Premium Amortization

The process of gradually reducing the premium paid on bonds purchased above their face value over the life of the bonds.

Straight-Line Method

The straight-line method is a technique for calculating depreciation of an asset by evenly spreading its cost over its expected useful life.