When a Market Is Efficient

question 88

Multiple Choice

When a market is efficient:

• A) any additional changes to make someone better off will make someone else worse off.
• B) a central planner must be involved.
• C) total surplus is zero.
• D) any additional changes to make someone better off will reduce the deadweight loss.

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Definitions:

Complementary Resource

Assets or inputs that are used together with another resource to produce goods or services, increasing each other's value.

Price

The amount of money required to purchase a good or service.

Demand

How much of a good or service buyers intend and can afford to buy across different prices within a set timeframe.

Marginal Revenue Product

The increase in revenue generated from the use of one more unit of a factor of production.