​When the Market Is in Equilibrium,with No Government Intervention

question 14

Multiple Choice

​When the market is in equilibrium,with no government intervention,

• A)​Total surplus is minimized
• B)Total surplus is maximized
• C)Government maximizes total revenue
• D)​None of the above

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Definitions:

Pollution

The presence in or introduction into the environment of a substance or thing that has harmful or poisonous effects.

External Benefit

A positive effect experienced by unrelated third parties resulting from a transaction or activity.

Subsidizing

The act of a government or organization providing financial support to reduce the cost of goods or services, often to encourage production or consumption.

External Benefit

A benefit that affects parties other than the buyers or sellers involved in a transaction, similar to a positive externality.