Which tools allow economists to determine if the allocation of resources determined by free markets is desirable?
A)Profits and costs to firms
B)Consumer and producer surplus
C)The equilibrium price and quantity
D)Incomes of and prices paid by buyers

Question

Quizplus · Accepted Answer

Consumer and producer surplus are tools used by economists to evaluate the welfare implications of a market outcome, including whether the allocation of resources is desirable. These measures help assess the benefits to consumers and producers, respectively, from participating in the market.

Which Tools Allow Economists to Determine If the Allocation of Resources