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Explain what is meant when it is said that there are inefficiencies in the production of goods and the allocation of resources.

The economy achieves optimal allocation of resources when productive and allocative efficiency are attained: · Productive efficiency occurs when products are made using the least possible amount of scarce re...
BS
Answered by Blanca S. • Economics tutor
6784 Views

Why is the demand curve downwards sloping?

The demand curve slopes downwards due to the idea of diminishing marginal utility. This is the idea that the consumer receives less additional utility for each extra unit of the good consumed.The substitutio...
JB
Answered by Joanna B. • Economics tutor
5377 Views

If the market price of a good is above the equilibrium price, explain the chain of events that should occur to return the price of the good to equilibrium

Assuming the goods are normal, and not inferior or a luxury good, and demand and supply is elastic, If the market price of a good is above the equilibrium price- the value set by the intersection of demand a...
AD
Answered by Amera D. • Economics tutor
3828 Views

Explain what is meant by allocative efficiency and Pareto optimality. Consider whether they are linked .

Allocative efficiency refers to when the bundle of goods being produced is an efficient bundle. Hence, if allocative efficiency is not being achieved then resources can be reallocated to produce a different ...
TD
16559 Views

What is a public good?

A public good is a good that is non excludable and non rivalrous. Non excludable means that anyone can use it; the benefits are not limited to just those who paid for it. Non-Rivalrous means that consumption...
IW
3240 Views