Which Statement About Markets, Consumer and Producer Behavior in Markets

question 4

Multiple Choice

Which statement about markets, consumer and producer behavior in markets, and market theory is false?

• A) Market consumers attempt to maximize utility based on preference and price.
• B) Market theory states that the market achieves competitive equilibrium based on allocative efficiency.
• C) Market competition is the mechanism for setting supply and demand.
• D) Market producers attempt to maximize profits based on their mix of input and output.

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Definitions:

Drawer

In the context of checks and negotiable instruments, the entity that writes and signs a check, instructing the bank to pay the stated amount to the party named on the document.

Payee

The party in a financial transaction who receives the payment.

Drawee

The party in a transaction who is directed to pay a specified amount of money, often referenced in the context of a check or draft.

Consumer Note

A debt instrument in which the buyer agrees to pay the seller a specified amount of money at a later date, often with interest.