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Author Question: Any competitive equilibrium is Pareto-efficient because, with a competitive equilibrium, A) the ... (Read 116 times)

misspop

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on: Jul 1, 2018
Any competitive equilibrium is Pareto-efficient because, with a competitive equilibrium,
 
  A) the marginal rates of substitution are equal for all consumers.
  B) the price line is the contract curve.
  C) mutual gains from trade exist.
  D) the slope of the price line equals the ratio of the MRS for all consumers.

Question 2

If a competitive firm finds that it maximizes short-run profits by shutting down, which of the following must be true?
 
  A) p < AVC for all levels of output.
  B) p < AVC only for the level of output at which p = MC.
  C) p < AVC only if the firm has no fixed costs.
  D) The firm will earn zero profit.


cadimas

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Reply #1 on: Jul 1, 2018
Answer to Question 1

A

Answer to Question 2

A


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misspop

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Reply #2 on: Jul 1, 2018
Thank you :)


cadimas

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Reply #3 on: Jul 1, 2018
Happy to help you


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