Which of the following best describes the idea of market efficiency? Group of answer choices A market is efficient when government determines the price of the good. A market is efficient when there is only one seller of the good. A market is efficient when total net gains (consumer surplus + producer surplus) are maximized. A market is efficient when consumers pay low prices.

Which of the following best describes the idea of market efficiency? Group of answer choices A market is efficient when government determines the price of the good. A market is efficient when there is only one seller of the good. A market is efficient when total net gains (consumer surplus + producer surplus) are maximized. A market is efficient when consumers pay low prices.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter4: Markets In Action

Section: Chapter Questions

Problem 16SQ

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What is the term used to describe the situation where resources are allocated in a way that maximizes total surplus? A. Pareto efficiency B. Market equilibrium C. Social welfare D. Deadweight loss
which one of the following is true regarding "efficiency of competitive markets"?a. government intervention may cause a competitive market to become inefficient b. in a competitive market, efficiency ensures equity. c. overproduction causes a competitive market to be efficient. d. efficiency is attained when producer surplus is maximized. e. competitive markets are always efficient
When a market is competitive and functioning properly, economic theory predicts that the market equilibrium will be efficient. However, this may not always be the desired outcome. Market outcomes may be unequal or distorted by market failure. please answer this below. What effect will this solution have on consumer surplus, producer surplus, social surplus, and deadweight loss? Explain.
In a market, the consumer surplus is 800,000 units and the producer surplus is 100,000. Which of the following statement is true? Group of answer choices The market is efficient since marginal benefit is equal to marginal cost. The market is inefficient since consumer surplus is greater than producer surplus and marginal benefit is equal to marginal cost. The market is efficient since consumer gain more than the producer. The market is inefficient since consumer surplus is greater than producer surplus.
When a market is competitive and functioning properly, economic theory predicts that the market equilibrium will be efficient. However, this may not always be the desired outcome. Market outcomes may be unequal or distorted by market failure. What effect will this solution have on consumer surplus, producer surplus, social surplus, and deadweight loss? Explain.
When a market is in equilibrium, which of the following is not correct Select one: a. the price determines which buyers and sellers participate in the market. b. those buyers who value the good more than the price choose to buy the good. c. those sellers whose costs are less than the price choose to produce and sell the good. d. the marginal cost of producing the last unit of the good is equal to consumers' marginal benefit from consuming the last unit e. the opportunity cost of producing the last unit of the good is equal to the absolute advantage of producing it.
consider a market with typically shaped supply and demand curves. Suppose that at the market equilibrium, demand is relatively more price inelastic as compared to supply. Which of the following is true: 1. net social surplus all goes to suppliers 2. consumers' surplus is larger than producers' surplus 3. producers' surplus is larger than consumers' surplus 4. consumers' and producers' surplus are equal
Once the buyer and seller agree on a price and exchange the product, a total surplus is "realized" as the "gains from trade." True or false?
When Adam Smith talked about “the invisible hand” he argued that: High transaction costs normally prevent markets from achieving equilibrium. Prices, in the long run, end up where both fairness and efficiency are achieved. Changing prices leads to an “end” which buyers and sellers are not totally pleased with, but one that is efficient. Create mutually agreed upon prices over time if the market is subsidized. As prices increase, demand falls, but supply rises, creating an equilibrium outcome. Self-interested activities help eliminate shortages and surpluses if price ceilings and price floors are effectively utilized.
Which of the following statements is correct? Select one: a. Consumer surplus can be high for a low-priced good and low for a high priced good. b. Consumer surplus is always greater than producer surplus. c. The price of water is low relative to that of cars because the government provides water at affordable prices for households as a public service. d. The price of a good reflects its value to the consumer.
there are only 250 available seats in the hall where a very popular play is performed. The government determines a sufficiently low price for the play so that the ticket is affordable by majority of the society. This performance attracts not only the fans of the play but also scalpers to buy a ticket due to proffitable opportunities. Use supply and demand curves to illustrate this situation. Some claims that scalpers are beneficial for the society since they work to make the market more efficient. Using the concepts of producer and consumer surplus, how can you respond to this claim?
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