Exam 12: General Equilibrium and the Efficiency of Perfect Competition

You are unable to sleep because your hotel room is right underneath the noisy air conditioning system. We would classify this situation as an

The condition that exists when all markets in an economy are in simultaneous equilibrium is known as

In order to have an efficient distribution of final products to households,

When all the conditions for perfect competition are met,

A household ________ as long as the utility from the good's consumption is less than its market price.

The opportunity cost of using resources to produce more of one good instead of more of another good is its

Economic systems should only be judged on efficiency.

Efficiency and equity are synonymous.

A government policy generates $10,000 of benefits to underprivileged youth at a cost of $5,000 to taxpayers. The policy is Pareto efficient.

Refer to the information provided in Figure 12.4 below to answer the question(s) that follow. Figure 12.4 There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S^{0 and D0.} -Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, the equilibrium quantity of X will ________ and the equilibrium quantity of Y will ________.

With imperfect information, prices

Refer to the information provided in Figure 12.5 below to answer the question(s) that follow. Figure 12.5 -Refer to Figure 12.5. A firm produces hula hoops in a perfectly competitive market and currently produces and sells 100 per week. At this production quantity of 100 per week, society would be best served

A technological change in the production of cars will

General equilibrium exists when all markets in an economy are simultaneously in equilibrium.

Refer to the information provided in Figure 12.1 below to answer the question(s) that follow. Figure 12.1 -Refer to Figure 12.1. This firm is currently at Point B on the ATC curve. If this firm moves toward Point A, this will make the

If more output could be produced with the same amount of inputs,

A gas tax holiday would

In perfect competition, the condition that ensures that the right things are produced is

An activity that makes some people better off and nobody worse off is a

Market failures may be corrected through government intervention.