Which of the following conditions holds in an economically efficient competitive market equilibrium?
A) The deadweight loss is positive but at a minimum.
B) Producer and consumer surplus are exactly equal in size.
C) There are no positive and no negative external effects from consumption and production.
D) The marginal benefit of the last unit produced and consumed is maximized.
Answer: C
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The deregulation of oil pricing will
A. increase our dependence on foreign oil. B. make the United States energy independent by the year 2000. C. decrease domestic production. D. decrease the extent of the nation’s dependence on foreign oil.
Which questions need to be answered when tracing costs during a customer profitability analysis?
a. What are your cost objects? b. What processes does each customer initiate? c. What activities comprise each process? d. What resources are used by each activity? e. All of the above
If the price of cell phones increases by 5 percent and the quantity demanded falls by 2 percent, the absolute value of the price elasticity of demand is
A. 5 percent. B. 0.4. C. 5.0. D. 2.1.
Which of the following is NOT one of the reasons a firm might be expected to experience economies of scale?
A) specialization B) the dimensional factor C) improved productive equipment D) depreciation