If Markets Are Perfectly Competitive and Price Has a Value

question 215

Multiple Choice

If markets are perfectly competitive and price has a value other than its equilibrium value,then is it possible to identify an unrealized transaction that would make the buyer and the seller better off?

• A) Yes,always.
• B) Yes,often.
• C) Yes,occasionally.
• D) Yes,but only if the government intervenes to set the price.
• E) No,under no circumstances.

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Definitions:

Fallacy Of Composition

The error of assuming what is true of a part is automatically true of the whole.

Division

A logical fallacy where one assumes that what is true of a whole must also be true of its parts.

Slippery Slope Argument

A logical fallacy that argues a relatively small first step will lead to a chain of related events culminating in some significant effect, often negative.

Strength Of Link

The degree to which two variables are related or associated with each other, often measured in statistical analyses.