If There Are No External Costs or Benefits, No Price

question 83

Multiple Choice

If there are no external costs or benefits, no price or quantity regulations, no taxes or subsidies, and the good is not a public good or a common resource, then efficiency is

• A) achieved when a monopoly produces the good.
• B) achieved when the amount of output exceeds the amount produced in a competitive market.
• C) achieved when the good is produced in a competitive market.
• D) unrelated to the amount produced in a competitive market.

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Definitions:

Wage-Rate Compression

A situation where differences in wages among employees narrow, often leading to less distinction in pay between higher and lower-level jobs.

Compensation Difference

The variation in pay and benefits among employees, which can be due to factors like experience, education, job function, or performance.

Job Evaluation Systems

Formal processes and criteria used by organizations to determine the relative value and complexity of jobs within the organization to establish fair compensation.

Developmental Purpose

The aim of fostering growth, improvement, and enhancement of skills and abilities in an individual or organization.