Markets fail to maximize total surplus when:
A. society's choices impose costs or benefits on other societies.
B. individual choices impose costs or benefits on others.
C. when all costs and benefits are received by participants in transactions.
D. producer surplus is not exactly equal to consumer surplus.
Answer: B
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A) the Fed selling government securities. B) an increase in lending by banks. C) a decrease in demand deposits. D) a decrease in the quantity of money.
In economics, "demand" refers to
A) the intensity of desire for a good. B) the amount of a good people need rather than the amount they want. C) the satisfaction a good will provide a person. D) how much of a good people will buy at any price during a given time period.