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

question 137

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 the 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:

Indemnity

A contractual obligation of one party to compensate the loss incurred by another party.

Contract Law

The body of law that regulates legally binding agreements between parties.

Income-Splitting

A tax strategy used by families or partnerships to divide income amongst members to lower the overall tax liability by utilizing lower tax brackets.

Back Pay

Compensation owed to an employee for a past period, typically due to underpayment or wage disputes.