Answered: Question 9 Suppose that benefits…

Applications and Investigations in Earth Science (9th Edition)

9th Edition

ISBN:9780134746241

Author:Edward J. Tarbuck, Frederick K. Lutgens, Dennis G. Tasa

Publisher:Edward J. Tarbuck, Frederick K. Lutgens, Dennis G. Tasa

Chapter1: The Study Of Minerals

Section: Chapter Questions

Problem 1LR

See similar textbooks

Related questions

Question

Question 9

Suppose that benefits of a current allocatively efficient government program are received by a large number of people and costs are paid by a small number of people. The distribution of costs and benefits make it ______________ that a government will reject the program.

more likely

less likely because the costs are greater than the benefits and thus the program should not be rejected

unclear as rejecting or continuing the program depends upon whether benefits are greater than costs, not the number of people involved

less likely because the benefits are greater than the costs and thus the program should not be rejected

Expert Solution

Step 1

Allocative efficiency means that resources are being used to produce the goods and services most wanted by society. The economy is then located at the optimal point on its production possibilities curve where marginal benefit equals marginal cost for each good.

Productive efficiency means the least costly production techniques are being used to produce wanted goods and services. Example: manual typewriters produced using the least-cost techniques but for which there is no demand.