Allocative Efficiency in a Market Means That Resources Are Appropriated

question 18

Multiple Choice

Allocative efficiency in a market means that resources are appropriated such that

• A) the additional social benefits outweigh the additional social costs
• B) the additional social benefits outweigh the additional private benefits
• C) the marginal social benefits are equal to the marginal social costs
• D) the marginal social benefits are greater than the marginal social costs

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Definitions:

Response Threshold

It is the minimal amount of stimulus intensity required for a neuron to fire a response or for a specific response criterion to be met in behavior.

Psychophysics

The scientific study of the relationship between stimuli (which are physical) and the sensations and perceptions they produce in the observer.

Physical Energy

The capacity to perform work or to produce physical changes within the body or environment, stemming from physical or chemical resources.

Sensory Physiology

The study of how organisms perceive and respond to physical stimuli in their environment through sensory organs.