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1. Allocative efficiency in a competitive market is achieved when
A. the marginal benefit equals the marginal cost from the last unit sold.
B. producer surplus equals the total amount firms receive from consumers minus the cost of production.
C. consumers and producers are satisfied.
D. economic surplus is equal to consumer surplus.
2. Suppose the marginal cost curve in the short run first decreases and then increases. If marginal cost is increasing, _____ must be _____.
A. average variable cost; increasing
B. marginal product; decreasing
C. marginal product; increasing
D. average total cost; increasing
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