Economic efficiency is defined as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the marginal cost of production, and in which
A) the sum of consumer surplus and producer surplus is at a maximum.
B) economic surplus is minimized.
C) the sum of the benefits to firms is equal to the sum of the benefits to consumers.
D) the sum of consumer surplus and producer surplus is minimized.
Answer: A
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If the U.S. capital and financial account balance has a $30 million surplus and there was no change in official reserves during that year, we know that
A) the United States has a $30 million current account deficit. B) U.S. official reserves have increased by $30 million. C) the United States is a net lender. D) U.S. net foreign lending must equal $30 million. E) the United States has a $30 million current account surplus.
The strong demand for housing, rising housing prices, and a construction boom from 2000 to 2005 were a result of
a. market forces that were eventually cut short by the stock market crash of 2008. b. policy changes that had positive initial effects, but negative long-term effects. c. tightened mortgage lending standards that reduced the risks of obtaining a home mortgage. d. the rising interest rates of that period, which increased the demand for housing.