When the Allocation of Resources Is Such That a Different

question 26

Multiple Choice

When the allocation of resources is such that a different allocation would increase society's welfare, economists say:

• A) market failure has occurred.
• B) the efficiency condition is met.
• C) decision makers have faced the full marginal benefits and marginal costs of their decisions.
• D) producers have maximized total cost.

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Definitions:

Medicare Taxes

Taxes withheld from employees' paychecks and also matched by employers to fund the Medicare program, part of the Federal Insurance Contributions Act (FICA) tax.

Federal Tax Withholding

The amount of money withheld from an employee's paycheck by an employer and sent directly to the government as partial payment of income tax.

FICA Withholding

The process of deducting Social Security and Medicare taxes from an employee's paycheck, as required by the Federal Insurance Contributions Act.

Payroll Tax Deposits

Amounts employers set aside and send to tax authorities to cover their obligations for employee payroll taxes.