If a Market Is Allocatively Efficient

question 1

Multiple Choice

If a market is allocatively efficient,

• A)firms are minimizing marginal cost
• B)firms are minimizing total cost
• C)consumers are minimizing expenditures
• D)it must be impossible to increase total utility
• E)it must be impossible to decrease output

---

Definitions:

Charitable Contributions

Money or goods given to organizations for the purpose of helping people or supporting societal, educational, religious, or other charitable activities.

Favorable Tax Treatment

Tax policies or provisions that reduce the tax burden on certain activities, income types, or investments to encourage their growth or stability.

Marginal Adjustment

Small, incremental changes made to a plan, system, or calculation in response to changes in circumstances or new information.

Marginal Changes

Small incremental adjustments to a plan of action, often analyzed in economics to understand the effects of slightly altering production, consumption, or investment.