When Is an Allocation of Resources Said to Be Inefficient

question 27

Multiple Choice

When is an allocation of resources said to be inefficient

• A)when a good is not being produced by the sellers with the lowest cost
• B)when producer surplus is not at a minimum
• C)when consumer surplus is not at a maximum
• D)when equilibrium is not an equitable distribution of resources

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Definitions:

Stock Indices

Aggregated measures that track the performance of a basket of stocks, representing a specific market or sector, to gauge market trends.

Canadian Stock Market

The financial market in Canada where securities are bought and sold, including the Toronto Stock Exchange and the TSX Venture Exchange.

Underpricing

The practice of setting the initial offering price of a security, typically shares, below its market value, which often leads to a first-day surge in its stock price.

IPO

Initial Public Offering, the process by which a private company becomes publicly traded by offering its shares for the first time to the public.