When Economists Say That Market Equilibrium Is Consistent with Economic

question 78

Multiple Choice

When economists say that market equilibrium is consistent with economic efficiency, they mean

• A) the total gains from trade (the combined area of producer and consumer surplus) are smaller than potentially could be the case at a different price and quantity.
• B) all units creating more benefit than cost have been produced.
• C) some units have been produced that cost more than the benefits they create.
• D) consumers and producers have made decisions without properly taking into account the market price.

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Definitions:

Gametophyte Generation

The sexual phase in the life cycle of plants and algae that produces gametes.

Seed

The reproductive unit of angiosperms and gymnosperms, capable of developing into another such plant.

Vascular Plants

Plants that possess specialized tissues, xylem and phloem, for water and nutrients transportation throughout the organism.

Seeds

Plant embryos enclosed in a protective outer covering, capable of developing into a new plant.