Which of the following conditions holds in an economically efficient competitive market equilibrium?
A) Producer and consumer surplus are exactly equal in size.
B) There are no positive and no negative external effects from consumption and production.
C) The deadweight loss is positive but at a minimum.
D) The marginal benefit of the last unit produced and consumed is maximized.
B
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The likelihood of successful private solutions to problems caused by externalities depends, in part, upon the number of interested parties. Briefly explain
How does the real interest affect households' decisions about saving?
What will be an ideal response?
Advocates of the minimum wage
a. deny that the minimum wage produces any adverse effects. b. emphasize the benefits to teenagers of increases in the minimum wage. c. emphasize the low annual incomes of those who work for the minimum wage. d. All of the above are correct.
If the government wishes to increase GDP by $1,000b, and the MPC is 0.6, it should increase its spending by:
A. $400b. B. $1,000b. C. $600b. D. $250b.