The First Theorem of Welfare Economics Can Be Expressed as

question 78

Multiple Choice

The First Theorem of Welfare Economics can be expressed as

• A) the competitive equilibrium results only when no transactions costs exist.
• B) the competitive equilibrium does not involve reallocation of endowments.
• C) any efficient allocations can be achieved by competition.
• D) the competitive equilibrium is efficient.

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Definitions:

Maximum-Output Alternatives

Options within a production process that result in the highest level of output, utilizing resources to their fullest potential.

Specialization

The process by which individuals, firms, or countries concentrate on producing a narrow range of goods or services to gain greater efficiencies and boost economic output.

Brazil

A large South American country with a diverse ecosystem, known for its Amazon rainforest, rich culture, and significant economic influence in Latin America.

Poland

A country located in Central Europe, known for its rich history, cultural heritage, and significant contributions to the arts, science, and politics.