If There Is Allocative Efficiency in a Purely Competitive Market

question 40

Multiple Choice

If there is allocative efficiency in a purely competitive market for a product, the maximum price consumers are willing to pay is

• A) less than marginal benefit.
• B) greater than marginal cost.
• C) equal to the amount of efficiency or deadweight losses.
• D) equal to the minimum price producers are willing to accept.

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Definitions:

Central Nervous System

A major part of the nervous system that includes the brain and spinal cord, responsible for processing and sending out information.

Limbic System

A complex system of nerves and networks in the brain, involving various areas near the edge of the cortex concerned with instinct and mood. It controls the basic emotions (fear, pleasure, anger) and drives (hunger, sex, dominance, care of offspring).

Endocrine System

The body system consisting of a set of glands that regulate the activities of certain organs by releasing their chemical products into the bloodstream.

Electrochemical Transmission

The process of nerve cells communicating with each other through electrical signals and chemical neurotransmitters across synapses.