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Economics
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Efficiency in a market is achieved when

a. social planner intervenes and sets the quantity of output after evaluating buyers willingness to pay and sellers' costs

b. the sum of producer surplus and consumer surplus is maximized

c. all firms are producing the good at the same low cost per unit.

d. no buyer is willing to pay more than the equilibrium price for any unit of the good.

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Yusra Anees
Yusra AneesLv10
12 Jan 2021
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Related questions

Efficiency in a market is achieved when the sum of producer surplus and consumer surplus is maximized. Thus, the total surplus:

a. can be used to measure society's well-being.

b. is the sum of consumer and producer surplus.

c. amounts to value to buyers minus cost to sellers.

d. All of the above are correct.

True or False:

1. Consumer surplus is the buyer's willingness-to-pay minus the seller's opportunity cost of production.

2. If your willingness-to-pay for a hamburger is $3 and you paid $2, then your consumer surplus is $5.00

3. The opportunity cost of production for a seller includes the implicit cost of the seller's time.

4. The height of the supply curve at a selected quantity is the seller's opportunity cost of producing that marginal unit.

5. Total surplus (total well-being) is the seller's cost of production minus the buyer's willingness-to-pay.

6. The competitive market equilibrium outcome is efficient because it allocates the produced output to the buyers who place the highest value on the good

7. Producer surplus is the area above the supply curve and below the price.

8. The competitive market equilibrium outcome maximizes total surplus (total well-being)

9. Producing and consuming more of a good will always increase the total surplus(total well-being).

If the social cost of producing a good or service exceeds the private cost
Ā 
A. A negative externality exists.
B. The market achiever's economic efficiency.
C. The sum of consumer surplus and producer surplus is maximized.
D. A positive externality exists.

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