Productive Efficiency Implies

question 69

Multiple Choice

Productive efficiency implies

• A) the possibility of gains in one area without losses in another.
• B) that more output has been produced.
• C) the impossibility of gains in one area without losses in another.
• D) that prices are stable.
• E) c and d

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Definitions:

Quota Rent

The extra profit that producers can make when supply is artificially restricted by an import quota.

Demand Price

The highest price that consumers are willing to pay for a good or service at a given quantity.

Supply Price

The lowest price at which a seller is willing to sell a good or service, influenced by costs of production and market demand.

Quota Rent

The earnings exceeding normal profits received by license holders when import quotas are in place.