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, resource allocation is efficient due to the alignment of supply and demand, which ensures that resources are allocated where they are most valued. This scenario assumes no externalities, public goods, common resources, taxes, or subsidies, which can distort market outcomes.

Which of the Following Is True? When There Are No