Which of the following statements is FALSE regarding economic efficiency? The most efficient outcome is the one with the greatest economic surplus. Efficient outcomes will not make everyone happy. Efficient outcomes have the possibility of making everyone better off. O Ifit is efficient, it is also equitable.

Which of the following statements is FALSE regarding economic efficiency? The most efficient outcome is the one with the greatest economic surplus. Efficient outcomes will not make everyone happy. Efficient outcomes have the possibility of making everyone better off. O Ifit is efficient, it is also equitable.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter4: Markets In Action

Section: Chapter Questions

Problem 4SQ

See similar textbooks

Similar questions

When does inefficiency exist in an economy? when a good is distributed fairly among buyers when a good is not distributed fairly among buyers when a good is not being produced by the lowest-cost producers when a good is being consumed by buyers who value it most highly
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 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.
Markets usually lead to efficiency for all of the following reasons except: Businesses with high costs may not survive. Markets encourage specialization and trade. Businesses have incentives to sell what people want to buy. Markets increase people's incentive to be self-sufficient.
When goods are allocated in a way that creates the largest economic surplus: output is evenly allocated across firms. production is minimized. efficient allocation has been achieved. the marginal benefit of the last unit bought is the maximum marginal benefit.
When economists say that market equilibrium is consistent with economic efficiency, they mean the total gains from trade (the combined area of producer and consumer surplus) are smaller than potentially could be the case at a different price and quantity. all units creating more benefit than cost have been produced. some units have been produced that cost more than the benefits they create. consumers and producers have made decisions without properly taking into account the market price.
What is the Samuelson Rule? Why does the market outcome, based on the actions of rational, self-interested individuals will deviate from the results of the Samuelson Rule
Two of the most fundamental findings in welfare economics describe the relationship between markets and Pareto-efficiency. What are these findings? What are the conditions of Pareto-efficiency that competitive economies satisfy? What is the significance of these results for the discipline of Public Economics?
Suppose a small town has two bakeries: Bakery A and Bakery B. The residents of the town have different preferences when it comes to buying bread. Bakery A produces high-quality bread and charges a price of $5 per loaf, while Bakery B produces standard-quality bread and charges a price of $3 per loaf. The demand for bread in the town can be represented by the following equations: Q_A = 200 - 10P_A + 4P_B Q_B = 150 - 6P_B + 2P_A Where: Q_A and Q_B are the quantities of bread demanded from Bakery A and Bakery B respectively. P_A is the price charged by Bakery A. P_B is the price charged by Bakery B. a) Calculate the quantities of bread demanded from Bakery A and Bakery B when P_A = $5 and P_B = $3. b) Calculate the quantities of bread demanded from Bakery A and Bakery B when P_A = $6 and P_B = $2. c) If Bakery A and Bakery B collaborate and decide to charge the same price, what price should they charge to maximize their combined revenue? Calculate the price and the corresponding quantity…
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.
The price of butter rises, causing the demand for another good to fall.this implies that the good are substitues
In a given town there is a lake which is a common pool property. A daily fishing license costs $20 per day and catching a fish costs $4 per pound. The opportunity cost of fishing is $97 per day. Daily demand for fish is Pd = 13 – 0.02Q where Q is the quantity of fish demanded (in pounds). How many fishermen will fish on the lake?