An Allocation Satisfies the Output Efficiency Condition If

question 30

Multiple Choice

An allocation satisfies the output efficiency condition if

• A) For every pair of goods, every input's marginal product equals the marginal rate of transformation
• B) For every pair of goods, every consumer's marginal rate of substitution equals the marginal rate of transformation
• C) Only applies for firms that produce the same product
• D) Only applies for consumers that consume the same goods

---

Definitions:

Cost of Equity

The yield a company needs to determine whether an investment satisfies its capital return criteria.

Risk-Free Rate

The expected return on an investment that carries no risk, often shown through the yield of government bonds.

Expected Stock Market Return

The predicted average return of the stock market or a specific segment of it over a specific period, considering historical trends and market conditions.

Dividends

Payments made by a corporation to its shareholder members, distributed from the company's profits.