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:

Depreciation Expense

The systematic allocation of an asset's cost over its useful life, reflecting the consumption or wear and tear of the asset.

Residual Value

The anticipated monetary value of an asset at the end of its operational life.

Units-Of-Production Depreciation

A depreciation method that allocates the cost of an asset over its useful life based on units produced rather than time, reflecting actual wear and tear.

Accumulated Depreciation

The total amount of depreciation expense allocated to a fixed asset since it was in service, reducing its book value on the balance sheet.