A Market Is Allocatively Efficient If

question 157

Multiple Choice

A market is allocatively efficient if

• A) the sum of the consumer surplus and the producer surplus has been maximized.
• B) consumer surplus has been maximized.
• C) producer surplus has been maximized.
• D) profit has been maximized.

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Definitions:

Trading Cost

Expenses incurred when buying or selling securities, including commissions, spreads, and slippage.

Weekly Cash Flows

The inflow and outflow of cash within a business measured on a weekly basis, crucial for understanding liquidity and operational efficiency.

Miller-Orr Model

A financial model used to manage cash balances, determining when and how much to transfer between interest-bearing investments and cash.

Initial Cash Balance

The amount of cash available in a company or individual's account at the start of a period.