Which Statement Is True

question 5

Multiple Choice

Which statement is true?

• A)A competitive market maximizes total surplus as all the gains from trade are realized.
• B)In a competitive market all trade for which the MB is greater than or equal to the MC of production take place.
• C)If output was increased beyond the traded in a competitive market total surplus would decrease
• D)The competitive equilibrium outcome is Pareto efficient.
• E)All of the above.

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Definitions:

Labor Force

The total number of people employed or seeking employment in a country or specific area.

Time Variance

The difference between the actual time taken to perform an activity and the expected or standard time allotted for it.

Direct Labor Hours

A measure of the total amount of time workers spend on direct production activities.

Unfavorable

A term often used in finance and accounting to describe results or variances that are worse than expected or budgeted.