When a competitive market achieves allocative efficiency, it means that: A. The

C. The combined consumer and producer surplus is maximum B. real GDP is halved

ID: 1099487 • Letter: W

Question

When a competitive market achieves allocative efficiency, it means that:

A. The marginal benefit of having the product is greater than the marginal cost

B. The buyers are getting the maximum consumer surplus from the product

C. The combined consumer and producer surplus is maximum

D. The quantity demanded is greater than the quantity supplied

Suppose that an economy's output does not change from one year to the next, but the price level doubles. What happens to real GDP?

A. real GDP doubles

B. real GDP is halved

C. real GDP doesn't change

D. There is not enough information to determine what happens to real GDP

C. The combined consumer and producer surplus is maximum

B. real GDP is halved

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