When economists say that market equilibrium is consistent with economic efficiency, they mean
a. the total gains from trade (the combined area of producer and consumer surplus) are smaller than potentially could be the case at a different price and quantity.
b. all units creating more benefit than cost have been produced.
c. some units have been produced that cost more than the benefits they create.
d. consumers and producers have made decisions without properly taking into account the market price.
B
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If the Federal Reserve raises its target inflation rate, the monetary policy reaction function ________ and the aggregate demand curve ________.
A. shifts upward to the left; shifts to the right B. shifts downward to the right; shifts to the left C. shifts downward to the right; shifts to the right D. shifts upward to the left; shifts to the left
Tina Eckstrom and her husband bought a deferred annuity in 1954 that started paying them $700 a month in retirement benefits in 1994 . During the 40 years period, the price level rose 3.2 percent per year. Since 1994, the price level has risen 3.0 percent per year. They, along with millions of other people who live on fixed incomes, are examples of
a. those who are responsible for inflation b. people who gain from inflation c. people who lose from inflation d. the paradox of thrift e. underemployed persons
What gives rise to a natural monopoly? How do consumers benefit from a natural monopoly?
What will be an ideal response?
How might consumer credit laws contribute to the empowerment of individuals?
A) Seller and lender abuses are reduced under consumer credit laws. B) Consumers are able to borrow money regardless of their credit history. C) Lenders can choose not to extend credit to individuals with a poor credit rating. D) Consumer credit laws prevent individuals from borrowing money, keeping them out of debt.