When a Market Is Efficient

question 46

Multiple Choice

When a market is efficient:

• A) there is no exchange that can make anyone better off without someone becoming worse off.
• B) a central planner must be involved.
• C) total surplus is zero.
• D) an increase in price will reduce the deadweight loss.

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Definitions:

Statement of Changes

A financial report detailing the changes in equity of a company over a period, including transactions with shareholders and comprehensive income.

Stockholders' Equity

A company's net worth derived from the difference between its total assets and total liabilities, representing the ownership interest of its shareholders.

Consumable Items

Items that are intended to be used up and replaced in a short period of time, often part of operating supplies.

Expired Costs

Costs that have been incurred and cannot be recovered, often through the consumption of goods or by providing services in a given period.