When Property Rights Are Well Defined and Markets Are Competitive

question 42

Multiple Choice

When property rights are well defined and markets are competitive,

• A) the total gains from trade (the combined area of producer and consumer surplus) are maximized at the market equilibrium.
• B) the market equilibrium is consistent with economic efficiency in that all units creating more benefit than cost have been produced.
• C) the market will automatically move toward the price and quantity where the quantity supplied and the quantity demanded are in balance.
• D) all of the above are true.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values from the mean.

Mean

The average value of a set of numbers, calculated by dividing the sum of these numbers by the count of numbers in the set.

Population Standard Deviation

A measure of the dispersion or spread of a set of data points in a population, calculated as the square root of the variance.

Confidence Interval

A spectrum of values obtained from sample data, which has a high probability of encompassing an unknown characteristic of the entire population.