FHCE 5100 Lecture Notes - Lecture 8: Robert Nozick, Market Failure, Redistribution Of Income And Wealth

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amaranthsquirrel732

7 Nov 2017

School

University of Georgia

Department

Financial Planning, Housing and Consumer Economics

Course

FHCE 5100

Professor

Moorman

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Document Summary

Allocative efficiency: a situation in which the quantities of goods and services produced are those that people value most highly: not possible to produce more of one good without producing less of something else. Benefit you receive from consuming one more unit (what you are willing to forgo to get one more unit) Decreases as quantity of good increases: principle of decreasing marginal benefit. Opportunity cost of producing one more unit. Marginal cost exchange rate shows the amount of other goods that we must give up to produce. Increases as more of the good is produced one more unit of the good being produced. Highest-valued allocation: allocation is efficient if it is not possible to produce more of any good without producing less of something that is valued more highly. To find we compare marginal benefit & cost. Buyers distinguish between value (what buyer gets) and price (what buyer pays)

Related Questions

If an economy is producing efficiently, then:

A. There is no way to produce more of one good without producing less of another good

B. It is possible to produce more of both goods without increasing the quantities of od inputs that are being used

C. It is possible to produce more of one good without producing less of another good

D. It is not possible to produce more of any good at any cost

blueeel736

If an economy is producing efficiently then

a. it is not possible to produce more of any good at any cost

b. it is possible to produce more of one good without producing less of another good

c. it is possible to produce more of both goods without increasing the quantities of inputs that are being used

d. there is no way to produce more of one good without producing less of another good

indigomarten625

1. the marginal cost curve is

A. Downward sloping to reflect the bowed out PPF.

B. Downward sloping as marginal benefits increase.

C. Upward sloping because marginal cost falls as more of a good or service is produced.

D. Upward sloping to reflect the increasing opportunity cost of producing one more unit.

E. U-shaped to reflect the bowed out PPF.

2. 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.

3. Auditors working for a large accounting firm are often away from the office. When they are in the office, they are allowed to use any desk that is available. Which method is used to allocate desks?

A. lottery

B. first-come, first-served

C. Command

D. Contest

E. Sharing equally

4. The marginal cost of a good or service

A. Can be calculated from the marginal benefit of that good or service.

B. decreases as more of the good or service is produced.

C. Can be derived from the production possibilities frontier.

D. Graphs as a positively sloped curve, so it cannot be derived from the production possibilities frontier, which is downward sloping.

E. None of the above answers is correct.

5. The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

A. Marginal benefit.

B. Total benefit.

C. Marginal cost

D. Total cost.

E. Price.

FHCE 5100 Lecture Notes - Lecture 8: Robert Nozick, Market Failure, Redistribution Of Income And Wealth

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