Question 1

A policy which gains the winners more than the losers lose, in principle, could never result in unanimous approval of the policy.

Accepted Answer

A) True 
 B)False

Question 2

As tax rates rise linearly, DWL also rises linearly.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following must be true about homothetic tastes:

Accepted Answer

A) Utility functions that represent those tastes are homogeneous of degree 1. 
B) There exists a utility function that represents those tastes and is homogeneous of degree 1. 
C) There exists a utility function that represents those tastes such that the expenditure function is homogeneous of degree 1. 
D) The indirect utility function is homogeneous of degree zero. 
E) Both (a) and (c).
F)Both (b) and (c).
G)Both (b) and (d)
H)None of the above. 
A) Utility functions that represent those tastes are homogeneous of degree 1. 
B) There exists a utility function that represents those tastes and is homogeneous of degree 1. 
C) There exists a utility function that represents those tastes such that the expenditure function is homogeneous of degree 1. 
D) The indirect utility function is homogeneous of degree zero. 
E) Both (a) and (c).
F)Both (b) and (c).
G)Both (b) and (d)
H)None of the above.

Question 4

If tastes are homothetic, there exists a utility function that represents those tastes and that gives rise to an expenditure function which is homogeneous of degree 1 in utility.

Accepted Answer

A) True 
 B)False

Question 5

Whenever indifference curves have kinks, marginal willingness to pay curves have horizontal "flat spots".

Accepted Answer

A) True 
 B)False

Question 6

For perfect complements, the (uncompensated) demand curve slopes down and the compensated demand (or MWTP) curve is perfectly vertical.

Accepted Answer

A) True 
 B)False

Question 7

An increase in income causes compensated demand curves to shift inward and regular demand curves to shift outward.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following must be true about functions in the duality picture:

Accepted Answer

A) The utility function is homogeneous of degree 1. 
B) The indirect utility function is homogeneous of degree 1 in income. 
C) The uncompensated demand functions are homogeneous of degree 1. 
D) Both (a) and (b). 
E) Both (b) and (c).
F)Both (a) and (c)
G)All of the above.
H)None of the above. 
A) The utility function is homogeneous of degree 1. 
B) The indirect utility function is homogeneous of degree 1 in income. 
C) The uncompensated demand functions are homogeneous of degree 1. 
D) Both (a) and (b). 
E) Both (b) and (c).
F)Both (a) and (c)
G)All of the above.
H)None of the above.

A policy which gains the winners more than the losers lose, in principle, could never result in unanimous approval of the policy.

As tax rates rise linearly, DWL also rises linearly.

Which of the following must be true about homothetic tastes:

If tastes are homothetic, there exists a utility function that represents those tastes and that gives rise to an expenditure function which is homogeneous of degree 1 in utility.

Whenever indifference curves have kinks, marginal willingness to pay curves have horizontal "flat spots".

For perfect complements, the (uncompensated) demand curve slopes down and the compensated demand (or MWTP) curve is perfectly vertical.

An increase in income causes compensated demand curves to shift inward and regular demand curves to shift outward.

Which of the following must be true about functions in the duality picture:

Introduction

A Consumers Economic Circumstances

Economic Circumstances in Labor and Financial Markets

Tastes and Indifference Curves

Different Types of Tastes

Doing the Best We Can

Income and Substitution Effects in Consumer Goods Markets

Wealth and Substitution Effects in Labor and Capital Markets

Demand for Goods and Supply of Labor and Capital

One Input and One Output: a Short-Run Producer Model

Production With Multiple Inputs

Production Decisions in the Short and Long Run

Competitive Market Equilibrium

The Invisible Hand and the First Welfare Theorem

General Equilibrium

Choice and Markets in the Presence of Risk

Elasticities, Price-Distorting Policies, and Non-Price Rationing

Distortionary Taxes and Subsidies

Prices and Distortions Across Markets

Externalities in Competitive Markets

Asymmetric Information in Competitive Markets

Monopoly

Strategic Thinking and Game Theory

Oligopoly

Product Differentiation and Innovation in Markets

Public Goods

Governments and Politics

What Is Good Challenges From Psychology and Philosophy

Filters

Exam 10: Consumer Surplus and Deadweight Loss

A policy which gains the winners more than the losers lose, in principle, could never result in unanimous approval of the policy.

As tax rates rise linearly, DWL also rises linearly.

Which of the following must be true about homothetic tastes:

If tastes are homothetic, there exists a utility function that represents those tastes and that gives rise to an expenditure function which is homogeneous of degree 1 in utility.

Whenever indifference curves have kinks, marginal willingness to pay curves have horizontal "flat spots".

For perfect complements, the (uncompensated) demand curve slopes down and the compensated demand (or MWTP) curve is perfectly vertical.

An increase in income causes compensated demand curves to shift inward and regular demand curves to shift outward.

Which of the following must be true about functions in the duality picture:

Introduction

A Consumers Economic Circumstances

Economic Circumstances in Labor and Financial Markets

Tastes and Indifference Curves

Different Types of Tastes

Doing the Best We Can

Income and Substitution Effects in Consumer Goods Markets

Wealth and Substitution Effects in Labor and Capital Markets

Demand for Goods and Supply of Labor and Capital

One Input and One Output: a Short-Run Producer Model

Production With Multiple Inputs

Production Decisions in the Short and Long Run

Competitive Market Equilibrium

The Invisible Hand and the First Welfare Theorem

General Equilibrium

Choice and Markets in the Presence of Risk

Elasticities, Price-Distorting Policies, and Non-Price Rationing

Distortionary Taxes and Subsidies

Prices and Distortions Across Markets

Externalities in Competitive Markets

Asymmetric Information in Competitive Markets

Monopoly

Strategic Thinking and Game Theory

Oligopoly

Product Differentiation and Innovation in Markets

Public Goods

Governments and Politics

What Is Good Challenges From Psychology and Philosophy

Filters