Ch6___Allocation_Methods_and_Efficiency__Handouts_

Ch6___Allocation_Methods_and_Efficiency__Handouts_ -...

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Allocation Methods nd Efficienc CHAPTER 6 and Efficiency
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C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Describe the alternative methods of allocating resources and define and explain the features of an fficient allocation. efficient allocation. 2 Define consumer surplus. 3 Define producer surplus.
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6.1 ALLOCATION METHODS AND EFFICIENCY esource Allocation Methods ± Resource Allocation Methods Scare resources might be allocated by ommand Command Majority rule Contest irst ome first erved First-come, first-served Sharing equally Lottery ersonal characteristics Personal characteristics Force Market price
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6.1 ALLOCATION METHODS AND EFFICIENCY Command Command system allocates resources by the order (command) of someone in authority. For example, if you have a job, most likely someone tells you what to do. Your labor time is allocated to specific tasks by command.
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6.1 ALLOCATION METHODS AND EFFICIENCY Market Price When a market allocates a scarce resource, the people ho get the resource are those who are willing to pay who get the resource are those who are willing to pay the market price. ost of the scarce resources that you supply get Most of the scarce resources that you supply get allocated by market price. You sell your labor services in a market, and you buy most of what you consume in markets. For most goods and services, the market turns out to do a good job.
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6.1 ALLOCATION METHODS AND EFFICIENCY ty Good Y Qty Good Y per Day A Which output combination is roducing Efficiently B Producing Efficiently ?
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This note was uploaded on 03/24/2009 for the course ECON 101 taught by Professor Balaban during the Spring '07 term at UNC.

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Ch6___Allocation_Methods_and_Efficiency__Handouts_ -...

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