Consider the market for cheesesteak sandwiches in an economy with the market equilibrium price of $5.00 per cheesesteak sandwich.
1. Suppose that the current price for one cheesesteak sandwich is $8.00. At this price, the market is economically (inefficient?? or efficient??) because:
a. Some cheesesteak sandwiches produced incur opportunity costs that are less than their marginal benefits to consumers.
b. The opportunity cost of producing the last cheesesteak sandwich equals the marginal benefit of consumption.
c. Some cheesesteak sandwiches produced incur opportunity costs that exceed their marginal benefits to consumers.
2. Which of the following must be true for a market to be able to achieve an efficient outcome? Check all that apply.
a. The market price is determined solely by the forces of supply of and demand for a good.
b. Private-property rights are well-defined and enforced.
c. Every economic player works selflessly to promote the social interest.
3. Evaluate the following statement: “A good's market price collapses all relevant information about its uses into one number.”
True or False