Consider the market for hamburgers in an economy where the market equilibrium is

Question

Consider the market for hamburgers in an economy where the market equilibrium is characterized by a quantity of hamburgers of s0 million and a price of $5.00 per hamburger Suppose that currently 80 million hamburgers are being produced and sold at a price of $2.50. This outcome in the market for hamburgers is economically inefficient because: O Some hamburgers produced incur opportunity costs of production that exceed their value or marginal benefit to consumers. The opportunity cost of producing the last hamburger equals the marginal benefit of consumption. Which of the following must be true for a market to be able to achieve an efficient outcome? Check all that apply Private property rights are well-defined and enforced. Firms can freely enter or exit the market without any barriers. DEvery economic player works selflessly to promote the social interest Evaluate the following statement. True or False: The pricing system ensures that even the lowest-valued demands are satisfied True False

Explanation / Answer

1) This outcome is economically inefficient because : some hmburgers produced incur opportunity costs of production that exceeds their value or marginal benefits to consumers .

2) Achieveing efficient outcome : a) private property rights are well defined and enforced . b) firms can freely enter and exit .

3) FALSE . Pricing system ensures equilibrium in market where every demand may not be fulfilled .

4) FALSE . As timber is shortage in supply , so demand for bricks rise . So price of bricks also rises .

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