Which of the Following Conditions Holds in an Economically Efficient

question 50

Multiple Choice

Which of the following conditions holds in an economically efficient competitive market equilibrium?

• A) The deadweight loss is positive but at a minimum.
• B) Producer and consumer surplus are exactly equal in size.
• C) There are no positive and no negative external effects from consumption and production.
• D) The marginal benefit of the last unit produced and consumed is maximised.

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Definitions:

Critical Value(s)

Critical values are key points used to determine the region of rejection for a null hypothesis in statistical testing, ensuring the test's validity under specific confidence levels.

Non-directional

A hypothesis that does not specify the direction of the expected difference or relationship, indicating only that there is a difference.

Z-statistic

A numerical indicator that shows how a specific value compares to the average of a dataset, expressed as the number of standard deviations away from the mean.

Two-tailed Test

A statistical hypothesis test in which the area of rejection is on both sides of the sampling distribution, allowing for testing in both directions.