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:

Luminous Dot

A bright, shining point of light, often used in visual displays or as an indicator in various devices.

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Refers to the action or process of moving higher in position or status.

Selective Attention

The process of focusing on a particular object or task while ignoring irrelevant information or stimuli.

Stimulus Array

A set or collection of stimuli presented to an individual in order to elicit responses or behaviors for study.