Question

question 16
1 pts
economic efficiency in a competitive market is achieved when
consumers and producers are satisfied.
economic surplus is equal to consumer surplus.
producer surplus equals the total amount firms receive from consumers minus the cost of production.
the marginal benefit equals the marginal cost from the last unit sold.
question 17
1 pts
if, in a market, marginal benefit is less than marginal cost for the last unit sold,
the quantity sold is greater than the equilibrium quantity.
the quantity sold is less than the equilibrium quantity.
the government must force producers to raise prices in order to achieve economic efficiency.
the net benefit to consumers from participating in the market is less than the net benefit to producers.

Explanation:

• Question 16:
• Economic efficiency in a competitive market occurs when the marginal benefit (MB) equals the marginal cost (MC) for the last unit sold. This is because at this point, the sum of consumer surplus and producer surplus (economic surplus) is maximized.
• Just consumer and producer satisfaction is too vague. Economic surplus is the sum of consumer and producer surplus, not equal to consumer surplus. The definition of producer surplus is correct but does not address economic efficiency.
• Question 17:
• In a competitive market, equilibrium occurs where \(MB = MC\). If \(MBMB\), more units are being produced and sold than the equilibrium quantity (where \(MB = MC\)). Reducing production towards the equilibrium quantity will increase economic efficiency.
• If quantity sold is less than equilibrium (\(MB>MC\)), producing more would be efficient. Government - forced price - raising is not the solution for \(MB

Answer:

• Question 16: the marginal benefit equals the marginal cost from the last unit sold.
• Question 17: the quantity sold is greater than the equilibrium quantity.