00:01
So economic efficiency can be a little bit of a technical subject, but basically all concepts of economic efficiency boil down to making the best use of resources, right? we want to use the tools at our disposal in the best way possible.
00:18
That's what i mean or what the profession largely means by efficiency.
00:22
So let's think about this.
00:24
Which of these are consistent with efficiency? maximum gains from trade.
00:29
Yeah, absolutely.
00:30
Remember, we are trying to use the resources in the best way possible.
00:35
If we're not taking advantage of trade to better use our resources and we're leaving gains on the table, we could be reallocating our resources in a different way to get those gains from trade.
00:47
So yeah, maximum gains from trade are consistent with economic efficiency, right? b, it is the best use of resources.
00:57
This is, again, just the definition, right? that is literally the definition of economic efficiency.
01:03
I can't put it any more clearly than that.
01:05
That is just what it means.
01:07
C.
01:09
Maxed at market equilibrium.
01:13
And this is true with a caveat, if the market is well functioning.
01:23
And there are lots of markets in the real world that are not well functioning, right? and so i don't want you to interpret this as a blanket statement...