ECON 208 Chapter 3 || WELL-ENLIGHTENED!!

examples of inefficiency when still fully employing all resources correct answers -if firms do not use the least cost method of production -if the marginal cost of production is not the same for every firm in an industry -if too much of one product and too little of another product are produced productive efficiency for the firm correct answers -when the firm chooses among all available production methods to produce a given level of output at the lowest possible cost -requires the firm to be producing its output at the lowest possible cost -if firms are productively efficient, they are minimizing their costs and there is no way for them to increase output without using more resources productive efficiency for the industry correct answers -when the industry is producing a given level of output at the lowest possible cost -requires marginal cost to be equal across all firms in the industry -if an industry is productively efficient, it as a whole is producing its output at the lowest possible cost and there is no way for them to increase output without using more resources productive efficiency and the production possibility boundary correct answers -if firms and industries are productively efficient, the economy with be on rather than inside the PPB allocative efficiency correct answers -the economy is allocatively efficient when, for each good produced its marginal cost of production is equal to its price -allocative efficiency will be achieved when the marginal cost of producing the good equals the marginal value of consuming that good allocative efficiency and the PPB correct answers -allocation of resources in the economy changes as we move along the PPB -is one point that is allocative efficiency and higher up or lower down on the curve is inefficient perfect competition and efficiency correct answers -perfectly competitive industries are productively efficient -if an economy were made up entirely of perfectly competitive industries the economy would be allocatively efficient monopoly and efficiency correct answers -monopoly is not allocatively efficient because the monopolist's price always exceeds its marginal cost consumer surplus correct answers -difference between the value that customers place on a product and the payment that they actually make to buy the product producer surplus correct answers -difference between the actual price that the producer receives for a product and the lowest price that the producer would be willing to accept for the sale of that product -for each unit sold, producer surplus is the difference between price and marginal cost -to accept any amount less than the marginal cost would REDUCE the firms profits