The Conclusion That the Level of Output Is Efficient at the Market

question 85

Multiple Choice

The conclusion that the level of output is efficient at the market equilibrium rests on all of the following assumptions EXCEPT that

• A) buyers and sellers are well-informed.
• B) there are no external costs or benefits.
• C) the government regulates price and output.
• D) the market is perfectly competitive.

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Definitions:

Congested

Describes a state of overcrowding or overloading, often used in the context of traffic, networks, or systems running at or beyond capacity.

Common Resource

A resource like air or water that is not owned by anyone, cannot be easily limited to specific users, and is available for everyone to use, which might lead to overuse and depletion.

Public Park

A space that can be natural, semi-natural, or landscaped, designated for the enjoyment and recreation of people, or to safeguard wildlife or natural ecosystems.

Tragedy of the Commons

A situation in an economic system where individuals, acting independently and rationally according to their self-interest, behave contrary to the best interests of the whole group by depleting or spoiling shared resources.