We know we have reached efficiency if total surplus is

Question 1 options:

minimized.

undefined.

equal to zero.

maximized.

When looking at the difference between the marginal cost and the marginal benefit of a good at a certain production point and that difference is is as large as possible,

Question 2 options:

	resources are being used with maximum efficiency.
	allocative efficiency has been attained.
	more of the good should be produced.
	resources would create more value producing other goods and hence the production of this good should be decreased.

Question 3 (1 point)

There is always producer surplus when the

Question 3 options:

	marginal cost exceeds the price.
	price exceeds marginal cost.
	marginal benefit exceeds the price.
	marginal benefit exceeds the marginal cost.

Question 4 (1 point)

If the price of a good increases and the supply curve does not change, producer surplus ________. If the price of a good decreases, and the supply curve does not change, producer surplus ________.

Question 4 options:

	increases; increases
	does not change; does not change
	increases; decreases
	decreases; increases