A Condition Necessary for a Market to Achieve Economic Efficiency

question 179

Multiple Choice

A condition necessary for a market to achieve economic efficiency is that the market:

• A) demand curve must include the willingness to pay of all members of society who benefit from the good.
• B) demand curve must exclude the willingness to pay of all members of society who benefit from the good.
• C) demand curve must include all opportunity costs imposed on society for producing the good.
• D) supply curve must include the willingness to pay of all members of society who benefit from the good.

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Definitions:

Third-Party Beneficiaries

Individuals who are not directly involved in a contract but stand to benefit from it as stipulated by the contracting parties.

Seller's Warranties

Guarantees made by a seller regarding the condition, functionality, or quality of goods or services.

Liquidated Damages

Damages specified as a term of the contract, before a breach of contract occurs.

Breach of Contract

A violation of any of the agreed-upon terms and conditions of a binding contract.