UNIT 06 / MARKET FAILURE AND THE ROLE OF GOVERNMENT

Socially Efficient and Inefficient Market Outcomes6.1 test

100 questions with explanations after each answer.

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QUESTION 01 / 100Easy

Based on the figure below, which quantity maximizes total economic surplus?

QUESTION FIGURE

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Quantity is on the horizontal axis and marginal benefit and marginal cost are on the vertical axis. A downward- sloping MSB curve intersects an upward-sloping MSC curve at the socially efficient quantity Qs. A different market quantity Qm is labeled, and the area between MSB and MSC from Qm to Qs is shaded as deadweight loss.

Select one answerAQmBThe quantity at the demand interceptCEvery quantity above QsDZero unitsEQs

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Question 1