A Market Is Allocatively Efficient If

question 142

Multiple Choice

A market is allocatively efficient if

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

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Definitions:

Implied Warranties

Guarantees legally assumed in a transaction, suggesting that the product sold will meet certain standards of quality and reliability.

Caveat Emptor

A Latin phrase meaning "let the buyer beware," indicating that the buyer assumes the risk regarding the quality and condition of the item purchased.

Sales Contract

A legal agreement between a buyer and a seller specifying the terms and conditions of the sale of goods or services.

Strict Product Liability

A legal doctrine that makes manufacturers, distributors, or sellers liable for any defects in the products they market, regardless of fault or negligence.