Which of the following is an example of allocative inefficiency? O A. Consumers place positive value on obtaining an additional unit of each good produced in the economy. O B. At the current levels of output, consumers would be willing to pay $40 for an additional pair of shoes, and the cost of producing an additional pair of shoes is $40, while consumers would be willing to pay $4 for an additional pair of socks, and the cost of producing an additional pair of socks is $4. O C. The marginal cost of producing the last unit of steel is the same for all firms. D. The marginal cost of producing each good in the economy is equal to its price. *E At the current level f output, consumers would be willing to pay $40 for an additional pair of shoes, and the cost of producing an additional pair of shoes is $35.

Which of the following is an example of allocative inefficiency? O A. Consumers place positive value on obtaining an additional unit of each good produced in the economy. O B. At the current levels of output, consumers would be willing to pay $40 for an additional pair of shoes, and the cost of producing an additional pair of shoes is $40, while consumers would be willing to pay $4 for an additional pair of socks, and the cost of producing an additional pair of socks is $4. O C. The marginal cost of producing the last unit of steel is the same for all firms. D. The marginal cost of producing each good in the economy is equal to its price. *E At the current level f output, consumers would be willing to pay $40 for an additional pair of shoes, and the cost of producing an additional pair of shoes is $35.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.2P

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