If Perfect Competition Existed Everywhere, Along with Frictionless Exchange, Perfect

question 155

Multiple Choice

If perfect competition existed everywhere, along with frictionless exchange, perfect information, and constant returns to scale,

• A)consumers would carry out transactions directly with resource suppliers
• B)firms would not have the information necessary to calculate marginal productivities of resources
• C)entrepreneurs would be needed to collect information
• D)consumers would produce output and then engage in barter
• E)the economy would be organized into one large firm

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Definitions:

Monthly Salary

A fixed amount of money or compensation paid to an employee by an employer for services rendered during a month.

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service, often a percentage of the transaction.

Appliances

Electrical or mechanical machines that perform domestic functions, such as refrigerators or washing machines.

Net Proceeds

The final amount of money received from a transaction after deducting all associated costs and expenses.