Which of the Following Is Not a Necessary Condition for Economic

question 88

Multiple Choice

Which of the following is not a necessary condition for economic efficiency in competitive markets?

• A)The marginal rates of substitution of all goods across all consumers are equal.
• B)The prices of productive inputs are the same across all productive uses.
• C)The marginal rates of technical substitution are the same across all firms and industries.
• D)The marginal rates of substitution of two goods across all consumers will equal the marginal rates of transformation of the two goods.

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Definitions:

Relevant Discount Rate

The interest rate used to convert future payments or receipts into their present value, often reflecting the risk associated with the cash flows.

Salvage Value

The estimated resale value of an asset at the end of its useful life, reflecting what a company expects to recover, less disposal costs, once an asset is no longer needed for business operations.

Straight-Line Method

A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.

Net Equipment Capital Cost

The total cost of acquiring equipment for business operations, minus any salvage value or depreciation.