Exchange Efficiency, Input Efficiency, and Substitution Efficiency Are Satisfied When

question 22

Multiple Choice

Exchange efficiency, input efficiency, and substitution efficiency are satisfied when ______________________. This result is known as ______________.

• A)free trade occurs; Walras Law.
• B)all markets are at a general competitive equilibrium; Walras Law.
• C)all markets are at a general competitive equilibrium; the First Fundamental Theorem of Welfare economics.
• D)resources are scarce; the First Fundamental Theorem of Welfare economics.

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Definitions:

Competitive Markets

Markets characterized by a large number of buyers and sellers where no single entity has enough power to influence the price of goods or services significantly.

Four-firm Concentration Ratio

A measure indicating the total market share controlled by the four largest firms in an industry, used to determine the competitiveness of the market.

Localized Markets

Markets that are confined to a specific geographical area, where the products or services cater primarily to the local population.

Import Competition

Import competition involves domestic companies facing competition from foreign-produced goods and services in the domestic market.