Economic Efficiency Is Achieved When There Is a Market Outcome

question 56

Multiple Choice

Economic efficiency is achieved when there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and

• A)economic surplus plus consumer surplus equals producer surplus.
• B)consumer surplus plus producer surplus is maximized.
• C)economic surplus is minimized.
• D)the difference between consumer surplus and producer surplus is maximized.

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Definitions:

Induced Consumption

The portion of consumer spending that changes in response to changes in disposable income.

Disposable Income

The sum of funds that individuals or families can allocate towards savings or expenditure once they've deducted income taxes.

Disposable Income

The liquidity pool available for households to channel into saving and spending after income tax deductions.

Induced Consumption

The part of consumer spending that increases when disposable income rises and decreases when disposable income falls.