When Economists Describe a Market for a Specific Product as Being

question 89

Multiple Choice

When economists describe a market for a specific product as being economically "efficient," what do they mean?

• A)Production techniques are such that resources are used in the most technologically efficient manner.
• B)Consumption of the product is such that economic surplus is maximized.
• C)Production of the product is such that economic surplus is maximized.
• D)The quantity of the product produced and consumed is such that the economic surplus is maximized.
• E)There are no price controls in place in that market.

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Definitions:

Single Peaked

Refers to a preference or utility pattern where an individual's satisfaction increases up to a certain point, after which it starts to decrease, creating a peak at the optimum point.

Public Goods

Goods that are characterized by being non-excludable and non-rivalrous, meaning that no one can be excluded from their use and one person's use does not diminish another's.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning that one individual's consumption of the good does not reduce its availability to others and cannot be confined to paying customers only.

Private Goods

Describes products that are excludable and rivalrous, meaning their use by one individual prevents use by another.