If the Current Allocation of Resources in the Market for Hammers

question 76

Multiple Choice

If the current allocation of resources in the market for hammers is inefficient,then it must be the case that

• A)producer surplus exceeds consumer surplus in the market for hammers.
• B)consumer surplus exceeds producer surplus in the market for hammers.
• C)the sum of consumer surplus and producer surplus could be increased by moving to a different allocation of resources.
• D)the costs that sellers of hammers are incurring could be reduced by moving to a different allocation of resources.

---

Definitions:

Net Income

The final financial gain of a firm once it has subtracted expenses and taxes from its revenue.

Net Loss

The amount by which total expenses exceed total revenues, indicating that a business spent more than it earned during a given period.

Net Loss

This occurs when a company's expenses exceed its revenues during a specific period of time, leading to a negative net income.

Ending Capital

The amount of capital a company or individual has at the end of a financial period, after all transactions have been accounted for.