Which of the following is not an equilibrium condition in a general equilibrium analysis of a competitive economy?
A)Input markets are in equilibrium.
B)The quantity supplied equals the quantity demanded.
C)Factor incomes are evenly divided.
D)The marginal rate of transformation equals the marginal rate of substitution.

Question

Quizplus · Accepted Answer

Factor incomes being evenly divided is not an equilibrium condition in a general equilibrium analysis of a competitive economy. It is a distributional issue that can be addressed through policies outside the market system. The other options are all equilibrium conditions that must be satisfied for a competitive economy to be in equilibrium.

Which of the Following Is Not an Equilibrium Condition in a General