A Competitive Equilibrium Is Pareto Efficient Because at the Competitive

question 32

Multiple Choice

A competitive equilibrium is Pareto efficient because at the competitive equilibrium,

• A)prices reflect the differences in marginal rates of substitution across individuals.
• B)there are no further gains from trade.
• C)there is an equal distribution of the goods.
• D)everyone has the same level of utility.

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Definitions:

Debits

Entries on the left side of a double-entry bookkeeping system that increase asset or expense accounts, or decrease liability, equity, or revenue accounts.

Debits

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet or in an individual's bank account.

Assets

Resources owned or controlled by a person or company, expected to bring future economic benefits.

Credits

Accounting entries that increase liabilities or equity on the balance sheet, or decrease an asset or expense account on the income statement.