When Economists Use the Term 'Big Tradeoff' When Discussing Efficiency

question 36

Multiple Choice

When economists use the term 'big tradeoff' when discussing efficiency they are referring to the tradeoff between

• A) deadweight loss and producer/consumer surplus.
• B) marginal cost and marginal benefit.
• C) producer surplus and consumer surplus.
• D) efficiency and fairness.
• E) external costs and external benefits.

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Definitions:

Costs

Costs refer to the expenditure incurred by businesses to produce goods or services, including materials, labor, and overhead expenses.

Quintile Distribution

A statistical measure dividing a population into five equal groups according to a particular variable, such as income or wealth.

SNAP Program

The Supplemental Nutrition Assistance Program, a federal aid program in the United States that provides food-purchasing assistance for low- and no-income people.