In General (And in the Absence of Market Failures),economic Surplus

question 71

Multiple Choice

In general (and in the absence of market failures) ,economic surplus will be maximized and economic efficiency will be achieved

• A)when the government is able to impose an equilibrium price.
• B)when consumers and producers can agree on the most advantageous division of economic surplus.
• C)when resources are allocated such that production of the good is maximized.
• D)when the government successfully determines what is best for society as a whole.
• E)in a competitive market where price is free to achieve its market-clearing equilibrium level.

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Definitions:

Market Basket

A collection of goods and services used to track price changes over time for the purpose of calculating inflation or cost of living adjustments.

Consumer Goods

Products that are purchased for consumption by the average consumer.

Discouraged Workers

Individuals who are not actively seeking employment because they believe no jobs are available for them.

Frictionally Unemployed

Individuals who are temporarily out of work while moving between jobs or looking for their first jobs.