When a Market Is in Equilibrium and the Marginal Consumer

question 196

Multiple Choice

When a market is in equilibrium and the marginal consumer values a commodity at less than the social cost of producing it, which of the following are true?
(i) at market equilibrium the demand curve lies below the social cost curve
(ii) reducing production to a level below the equilibrium level could possibly raise total economic wellbeing
(iii) the equilibrium price is higher than necessary to insure maximum economic wellbeing

• A)(i) and (ii) only
• B)(i) and (iii) only
• C)(ii) and (iii) only
• D)(i), (ii) and (iii)

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Definitions:

Nonparametric Procedure

Statistical methods that do not assume a specific distribution for the data, often used when data doesn't fit normal distribution assumptions.

One-Sample T-Test

A statistical test used to determine whether the mean of a sample differs significantly from a known or hypothesized population mean.

Wilcoxon Signed Rank Test

A non-parametric statistical test used to compare two paired samples, to test whether their population mean ranks differ.

Demographic Characteristics

Attributes of populations, such as age, race, gender, and income, often used in research to segment and analyze groups of people.