Question : 7.5  Equity and Efficiency 1) Which of the following statements true? A) : 1377403

7.5  Equity and Efficiency

1) Which of the following statements is true?

A) The command system is remarkable at providing price signals that guides resources in a way that maximizes social surplus.

B) Market economies minimize waste and provide incentives to all market participants to promote their own interests.

C) Coordination of different economic agents and bringing them together to trade is a central problem of a free market economy.

D) The broader interests of societies are met more often under a command system in comparison to a market system.

2) ________ is concerned with the distribution of resources across society.

A) Social surplus

B) Equity

C) Efficiency

D) Utility

3) Which of the following statements is true?

A) Social planners are only concerned with efficiency and not equity.

B) Social planners are only concerned with equity and not efficiency.

C) To some, efficiency means an even distribution of goods across society.

D) To some, equity means an even distribution of goods across society.

4) Which of the following statements is true?

A) Maximum social surplus implies equity.

B) Pareto efficiency implies equity.

C) Taxation causes redistribution of wealth among the members in a society.

D) Market prices act as signals that result in equal distribution of income and wealth in the society.

5) The basic idea behind an auction is that:

A) buyers want to buy from the sellers with the lowest ask prices, and sellers want to sell to buyers with the highest bid prices.

B) buyers want to buy from the sellers with the highest ask prices, and sellers want to sell to buyers with the highest bid prices.

C) buyers want to buy from the sellers with the highest ask prices, and sellers want to sell to buyers with the lowest bid prices.

D) buyers want to buy from the sellers with the lowest ask prices, and sellers want to sell to buyers with the lowest bid prices.

6) A double oral auction is an auction in which:

A) sellers post asks and buyers post offers one after the other.

B) sellers post asks and buyers post bids simultaneously.

C) the highest bidders post their bids at the same time.

D) bidding starts from the lowest price to the highest price.

7) A bilateral negotiation is a bargaining mechanism in which:

A) a third party or an authority intervenes and decides the prices of the products traded in a market.

B) a single seller and a single buyer confront one another with bids and asks.

C) multiple buyers bargain with a single seller to determine the trading price.

D) multiple sellers bargain with a single buyer to determine the trading price.

8) Which of the following statements is true?

A) In case of auctions and bilateral negotiations, prices tend to approach the competitive equilibrium.

B) Bilateral negotiations allow a single buyer and a single seller to privately negotiate with bids and asks.

C) In auctions, buyers prefer buying from sellers with the highest ask prices.

D) In auctions, sellers prefer selling to buyers with the lowest bid prices.