Question : 51) We allocate resources efficiently when A) marginal benefit equal to : 1226524

51) We allocate resources efficiently when

A) marginal benefit is equal to marginal cost.

B) marginal benefit is greater than marginal cost by any amount.

C) marginal cost is greater than marginal benefit.

D) total benefit is greater than total cost.

E) marginal benefit is greater than marginal cost by as much as possible.

52) Allocative efficiency is achieved when the marginal benefit of a good

A) exceeds the marginal cost regardless of how much the difference is.

B) is less than its marginal cost.

C) is equal to its marginal cost.

D) equals zero.

E) exceeds the marginal cost by as much as possible.

53) All points on the production possibilities frontier

A) are production inefficient.

B) achieve allocative efficiency.

C) are production efficient but only one point achieves allocative efficiency.

D) are allocatively efficient but only one point achieves production efficiency.

E) are allocatively inefficient.

54) When the marginal benefit and marginal cost of sodas are equal, then

A) the production of sodas might be allocatively efficient but it is definitely production inefficient.

B) the allocatively inefficient amount of sodas is being produced.

C) more sodas should be produced to reach the allocatively efficient quantity.

D) fewer sodas should be produced to reach the allocatively efficient quantity.

E) the allocatively efficient amount of sodas is being produced.

55) When the marginal cost of producing a bike is greater than the marginal benefit of the bike, for resource use to be allocatively efficient

A) more bikes should be produced.

B) fewer bikes should be produced.

C) no more and no fewer bikes should be produced.

D) it must be determined if the production of bikes can be increased.

E) people must be educated to demand more bikes.

56) For resource use to be allocatively efficient, when the marginal benefit of a slice of pizza exceeds the marginal cost ________.

A) more slices of pizza should be produced

B) fewer slices of pizza should be produced

C) no more slices of pizza should be produced

D) allocative efficiency is reached only if the marginal benefit exceeds the marginal cost by as much as possible

E) None of the above answers is correct.

57) If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

A) resources are being used with maximum efficiency.

B) resources would create more value producing other goods and hence the production of this good should be decreased.

C) more of the good should be produced.

D) allocative efficiency has been attained.

E) Both answers A and D are correct.

58) Any point on the production possibility frontier is

A) attainable and might be allocatively inefficient.

B) attainable and must be allocatively efficient.

C) less production efficient than a point in the interior of the PPF.

D) always allocatively efficient but might or might not be production efficient.

E) always production efficient and always allocatively efficient.

59) Which of the following are the rules for finding the point of allocative efficiency?

A) Produce on the PPF and then produce where the marginal benefit and marginal cost are as large as possible.

B) Produce on the PPF and then produce where marginal benefit equals marginal cost.

C) Produce on the PPF and then produce where marginal benefit and marginal cost are constant.

D) Produce on the PPF and then produce where the marginal benefit exceeds marginal cost by as much as possible.

E) Produce anywhere on the PPF.

60) Allocative efficiency occurs

A) anywhere inside or on the production possibilities frontier.

B) when the total cost of production is minimized.

C) at all points on the production possibilities frontier.

D) at only one point on the production possibilities frontier.

E) at the points where the production possibilities frontier crosses the horizontal or vertical axis.