Why is the pricing outcome of a perfectly competitive firm efficient in economic sense?
What will be an ideal response?
A perfectly competitive firm sells its product at a price that equals the opportunity cost, or the marginal cost, to society of producing one more unit of the product. Because the price that consumers are willing to pay for the last unit of the good is the marginal benefit to them, the pricing outcome of a competitive firm implies that the marginal benefit to consumers equals the marginal cost to society of producing the last unit. This outcome is efficient because it is impossible to increase the output of any good without lowering the value of the total output produced in the economy.
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What gives money value under a fiat system?
A) Fiat money is also a commodity. B) The supply of fiat money is controlled by the government. C) Fiat money is backed by gold. D) Fiat money is the same as Treasury bonds.
A country specializes in the production of goods for which it has a comparative advantage, so
A) some producers and consumers win, some lose, but overall the gains exceed the losses. B) all producers win. C) all consumers win. D) producers win, consumers lose, but overall the gains exceed the losses.