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What is the situation called when the marginal private benefits (MPB) are equal to the marginal private costs (MPC) for an individual consumer or firm?
What is the situation called when the marginal private benefits (MPB) are equal to the marginal private costs (MPC) for an individual consumer or firm?
- Private efficiency (correct)
- Pareto optimality
- Social efficiency
- Market failure
When is social efficiency achieved?
When is social efficiency achieved?
- When MPB equals MSC
- When MSB equals MSC (correct)
- When MSB equals MPC
- When MPB equals MPC
What do economists describe as an improvement in social efficiency without making anyone worse off?
What do economists describe as an improvement in social efficiency without making anyone worse off?
- Market failure
- Pareto improvement (correct)
- Information asymmetry
- Monopoly powers
What is the failure of the market to allocate resources efficiently known as?
What is the failure of the market to allocate resources efficiently known as?
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What leads to welfare loss for society according to the text?
What leads to welfare loss for society according to the text?
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