Absent any violations of the conditions underlying the first welfare theorem, the competitive market equilibrium is efficient if and only if tastes are quasilinear.
Answer the following statement true (T) or false (F)
False
Rationale: The first welfare theorem holds regardless of whether tastes are quasilinear.
You might also like to view...
Assume the market demand for wheat may be written as
Q = 45 - 2p + 0.3Y + 1pb where Y refers to income and pb refers to the price of barley. Assuming that wheat and barley both sell for $1, and income is $20, calculate the price elasticity, cross price elasticity and income elasticity for wheat.
Regarding demand and supply, which of the following statements is NOT correct?
a. Demand and supply simultaneously determine equilibrium market price b. Demand expresses intentions, but supply does not c. Demand is a potential concept distinguished from the transactional even of "units sold" d. Supply is more like scenario planning for operations than for actual production e. all of the above statements are correct