1. Efficiency occurs when (Points : 1) 
the economy is producing what people want at least possible cost.
the economy has a fair and just distribution of income.
all markets are in equilibrium.
unemployment is low and prices are stable. 


2. Suppose a policy change will generate $100,000 of benefits for low-income families and $120,000 of costs for high-income families. This change can best be described as (Points : 1) 
Pareto efficient.
inefficient.
potentially efficient.
equitable. 


3. The ________ is the share of industry output in sales or employment accounted for by the largest four firms in an industry. (Points : 1) 
concentration ratio
contestability ratio
competitive index
collusive level 


4. Resources are allocated efficiently when (Points : 1) 
the market produces what people want.
economic profits are zero.
output is distributed in an equitable fashion.
output is produced in a sustainable fashion. 

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