Multiple choice

Which of the following is false for Clark's Product Exhaustion approach?

  1. There is perfect competition in product markets as well as factor markets.

  2. Prices and wages are manipulated by collusive agreements.

  3. There is a single wage rate for all occupations.

  4. The same commodities are produced in the same quantities and by the same methods.

  5. The quantity of each factor is given.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Clark's Product Exhaustion theorem is based upon the assumption that the prices as well as wages are not manipulated by government action or collusive agreements. This is the correct answer.

Keep practicing — related questions