Which of the Following Occurs When a Market Is Efficient

question 35

Multiple Choice

Which of the following occurs when a market is efficient?

• A) Consumer surplus equals producer surplus.
• B) Consumer surplus is as large as possible.
• C) Producer surplus is as large as possible.
• D) The sum of consumer surplus and producer surplus is maximized.
• E) The marginal benefit exceeds the marginal cost by as much as possible.

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Definitions:

Eurodollar

U.S. dollar-denominated deposits at foreign banks or foreign branches of American banks, used widely in international lending and financing.

LIBOR

The London Interbank Offered Rate, a benchmark interest rate at which major global banks lend to one another.

Money Markets

Financial markets for short-term borrowing and lending, typically dealing with assets that mature in less than one year.

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