When Economists Use the Term "Big Tradeoff" When Discussing Efficiency

question 257

Multiple Choice

When economists use the term "big tradeoff" when discussing efficiency they are referring to the tradeoff between

• A) external costs and external benefits.
• B) marginal cost and marginal benefits.
• C) producer surplus and consumer surplus.
• D) efficiency and fairness.
• E) deadweight loss and producer/consumer surplus.

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Definitions:

Capital Gain/Loss

The profit or loss made from selling an asset for more or less than its purchase price.

Depreciates

The process by which an asset loses value over time, often due to wear and tear, age, or obsolescence, impacting its useful life.

Straight Line

A method of calculating depreciation of an asset which assumes equal annual depreciation over the asset's useful life.

Salvage Value

The estimated resale or scrap value of an asset at the end of its useful life.