What Is Productive Efficiency

question 38

Multiple Choice

What is productive efficiency?

• A)a situation in which resources are allocated to their highest profit use
• B)a situation in which resources are allocated such that goods can be produced at their lowest possible average cost
• C)a situation in which resources are allocated such the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it
• D)a situation in which firms produce as much as possible

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Definitions:

Liquid Assets

Assets that can be quickly converted into cash without significant loss of value, such as stocks or government bonds.

Inventory

A complete list of items such as property, goods in stock, or the contents of a building.

Non-Cash Expenses

Expenses recorded on the income statement that do not involve an actual cash flow, such as depreciation and amortization.

Millions

A numeral representation indicating one thousand times one thousand, or 1,000,000.