Author Question: Which of the following statements is true of perfect competition? A) The outcome in a perfectly ... (Read 55 times)

jon_i · **on:** Jun 29, 2018

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.

Question 2

When your textbook says that it is misleading to say that the market economy produces an aggregate GDP-measured economic pie, the authors have the following claim in mind:

A) Unlike a pie, income in the economy can't be divvied out independent of the exchange process.
B) The economy produces more than just pies.
C) The pie metaphor focuses solely on real GDP and excludes the more important measure of nominal GDP.
D) The production of pies create no income opportunities for market participants.