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:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, with high elasticity indicating significant response and low elasticity indicating little to no response.

Oranges

A citrus fruit commonly consumed worldwide, both fresh and in juice form, and used as a commodity in agricultural markets.

Cross-Price Elasticity

A measure of how the quantity demanded of one good responds to a change in the price of another good.

Croissants

A type of light, flaky pastry originating from France.