Which of the following is true? When there are no externalities,public goods,common resources,taxes or subsidies,then
i.allocative efficiency occurs when marginal benefit exceeds marginal cost by as much as possible.
ii.an a competitive equilibrium,resource allocation is efficient.
iii.fair rules require income transfers from the rich to the poor.
A) Only ii
B) Only i
C) Only iii
D) i and ii
E) i and iii

Question

Quizplus · Accepted Answer

In a competitive equilibrium without externalities or other market distortions, resources are allocated efficiently, meaning marginal benefit equals marginal cost. Allocative efficiency does not occur when marginal benefit exceeds marginal cost, and fair rules do not inherently require income transfers.

Which of the Following Is True? When There Are No