When Economists Use the Word "Perfect," What Does It Indicate

question 14

Multiple Choice

When economists use the word "perfect," what does it indicate about the outcome of a market?

• A) Deadweight gains are maximized and marginal output is equal to zero.
• B) Consumer surplus is maximized and economic growth results from accelerated consumer spending.
• C) Producer surplus is minimized because society is harmed by excessive firm profits.
• D) Social welfare is maximized,resulting from an absence of deadweight loss.
• E) Producer surplus and consumer surplus are exactly equal.

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Definitions:

Social Loafing

A scenario in which individuals working in a group setting display reduced effort in achieving objectives, unlike when working independently.

Deindividuation

A phenomenon where individuals in a group lose a sense of self-awareness and as a result, may act differently than they would alone, often leading to anti-normative and disinhibited behavior.

Group Polarization

Group polarization refers to the tendency for a group to make decisions that are more extreme than the initial inclination of its members, following group discussion.

Social Facilitation

The inclination of individuals to behave differently around others than when by themselves, usually showing improvement in easy or practiced tasks.