If Equilibrium Is Achieved in a Competitive Market

question 2

Multiple Choice

If equilibrium is achieved in a competitive market

• A)there is no deadweight loss.
• B)the deadweight loss will be maximized.
• C)the deadweight loss will equal the sum of consumer surplus and producer surplus.
• D)the deadweight loss will be the same as the opportunity cost of the last unit of output sold.

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Definitions:

Opportunity Cost

represents the value of the next best alternative forgone as a result of making a decision.

Scarcity

The fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources.

Economic Growth

is an increase in the production of goods and services in an economy over a period of time, often measured by GDP.

Entrepreneurial Ability

is the skill set and initiative to start, manage, and succeed in a new business venture or enterprise.