Economic Efficiency in a Free Market Occurs When

question 152

Multiple Choice

Economic efficiency in a free market occurs when

• A)consumer surplus is maximised.
• B)producer surplus is maximised.
• C)the sum of consumer surplus and producer surplus is maximised.
• D)price is as low as possible.

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Definitions:

Resources

Assets, materials, or substances that are available and valuable in producing goods or providing services.

Externalities

Costs or benefits that affect a party who did not choose to incur that cost or benefit, caused by an economic transaction.

Health Insurance

A form of insurance that covers medical expenses that arise due to illness or injury, typically providing coverage for a variety of healthcare services.

Quantity

The amount or number of a material or immaterial good considered as a unit or an aggregate.