Which of the following statements is true of perfect competition?
A) The outcome in a perfectly competitive market is Pareto inefficient.
B) The total value of production across a perfectly competitive industry is maximized.
C) Firms under perfect competition produce at a point where price is greater than marginal cost.
D) Consumers in a competitive market purchase at a point where marginal utility is greater than price.
B
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A requirement for development is
a. an unreliable system of financial institutions b. a lack of saving by households and firms c. low confidence in domestic currency d. low and predictable inflation that encourages saving e. None of the answers is correct
Using the UIP equation to determine the spot exchange rate, assume that the expected spot rate (after one year) for euros (in terms of dollars) = $1.50, the current interest rate on euro deposits is 4.5%, and the current interest rate on dollar deposits is 5.5%. Which of the following current spot rates would satisfy the equation?
a. $1.65 b. $1.50 c. $1.485 d. $1.25
A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.
"Debt repudiation" occurs when
A) a government announces it will no longer run nominal deficits. B) a government announces it will no longer run real deficits. C) a government announces it will no longer honor its debt obligations. D) a central bank will no longer monetize the debt.