Exam 10: General Equilibrium and Economic Welfare

Consider a society consisting of just a farmer and a tailor.The farmer has 10 units of food but no clothing.The tailor has 20 units of clothing but no food.Suppose each has the utility function U = F ∗ C.The price of clothing is always $1.If the price of food is $3,does a competitive equilibrium exist? If not,what will happen to the price of food?

(Essay)

4.9/5

(90)

Question 41

If society were to maximize the utility of its worst-off member,the final allocation would most likely be

(Multiple Choice)

4.8/5

(74)

Question 42

Explain why a government may select an inefficient allocation.

(Essay)

4.8/5

(85)

Question 43

Most of the debates in the U.S.Congress center on

(Multiple Choice)

4.7/5

(83)

Question 44

The saying "what's that got to do with the price of tea?" reflects

(Multiple Choice)

4.7/5

(87)

Question 45

There are two closely related crops,X and Y,with the following demand functions Q_X= 180 - 2P_X + P_Y and Q_Y = 150 + P_X - P_Y where Q_X is the quantity of X,P_X is the price of X,Q_Y is the quantity of Y,and P_Y is the price of Y.These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves.The short-run perfectly inelastic supply for X is 200 while the short-run perfectly inelastic supply for Y is 100.In equilibrium,the prices are

(Multiple Choice)

4.8/5

(79)

Question 46

-Suppose the production possibilities for two countries,producing either food or clothing,are shown in the above figure.They can each produce any linear combination as well.Measuring food on the horizontal axis,the joint production possibility frontier has a vertical intercept of

(Multiple Choice)

4.8/5

(93)

Question 47

If a society only cares about efficiency and not equity,then

(Multiple Choice)

4.8/5

(85)

Question 48

Employing a general equilibrium approach,describe the effect of a new law that prohibits steel imports.

(Essay)

5.0/5

(88)

Question 49

Suppose two people start with an initial endowment and trade until they obtain a Pareto-efficient allocation with the corresponding price line.What happens when more people who have the same tastes and endowments as the original two traders are included in the Edgeworth box analysis?

(Multiple Choice)

4.8/5

(79)

Question 50

Gains from trade will be possible as long as

(Multiple Choice)

4.8/5

(87)

Question 51

-The above figure shows a production possibility frontier for a society with two members,Al and Bruce.If point "a" is the efficient product mix,draw a possible Edgeworth box and indifference curves.

(Essay)

4.9/5

(69)

Question 52

Any point on the contract curve is Pareto efficient regardless of the initial endowment.

(True/False)

5.0/5

(81)

Question 53

How does competition ensure that the efficient product mix is attained?

(Essay)

4.8/5

(75)

Question 54

At a perfectly competitive equilibrium with production and trade,the slope of the production possibility curve will be

(Multiple Choice)

4.9/5

(84)

Question 55

Explain why Robin Hood's practice of stealing from the rich to give to the poor is never Pareto efficient.

(Essay)

4.9/5

(89)

Question 56

Moving away from the contract curve will

(Multiple Choice)

4.8/5

(84)

Question 57

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Considering only the labeled points,point c is a possible equilibrium

(Multiple Choice)

4.8/5

(73)

Question 58

Suppose a society's PPF for food (F)and clothing (C)can be written as 25 = F² + C².If all consumers have the same endowment and the same utility function U_i = F_i ∗ C_i,what is the efficient product mix of food and clothing?

(Essay)

4.8/5

(74)

Question 59

-Suppose the production possibilities for two countries,producing either food or clothing,are shown in the above figure.They can each produce any linear combination as well.Once free trade is allowed,Canada will produce

(Multiple Choice)

4.9/5

(76)

Question 60

Showing 41 - 60 of 112

If society were to maximize the utility of its worst-off member,the final allocation would most likely be

Explain why a government may select an inefficient allocation.

Most of the debates in the U.S.Congress center on

The saying "what's that got to do with the price of tea?" reflects

-Suppose the production possibilities for two countries,producing either food or clothing,are shown in the above figure.They can each produce any linear combination as well.Measuring food on the horizontal axis,the joint production possibility frontier has a vertical intercept of

If a society only cares about efficiency and not equity,then

Employing a general equilibrium approach,describe the effect of a new law that prohibits steel imports.

Suppose two people start with an initial endowment and trade until they obtain a Pareto-efficient allocation with the corresponding price line.What happens when more people who have the same tastes and endowments as the original two traders are included in the Edgeworth box analysis?

Gains from trade will be possible as long as

-The above figure shows a production possibility frontier for a society with two members,Al and Bruce.If point "a" is the efficient product mix,draw a possible Edgeworth box and indifference curves.

Any point on the contract curve is Pareto efficient regardless of the initial endowment.

How does competition ensure that the efficient product mix is attained?

At a perfectly competitive equilibrium with production and trade,the slope of the production possibility curve will be

Explain why Robin Hood's practice of stealing from the rich to give to the poor is never Pareto efficient.

Moving away from the contract curve will

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Considering only the labeled points,point c is a possible equilibrium

Suppose a society's PPF for food (F)and clothing (C)can be written as 25 = F² + C².If all consumers have the same endowment and the same utility function U_i = F_i ∗ C_i,what is the efficient product mix of food and clothing?

-Suppose the production possibilities for two countries,producing either food or clothing,are shown in the above figure.They can each produce any linear combination as well.Once free trade is allowed,Canada will produce

Introduction

Supply and Demand

Applying the Supply and Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 10: General Equilibrium and Economic Welfare

If society were to maximize the utility of its worst-off member,the final allocation would most likely be

Explain why a government may select an inefficient allocation.

Most of the debates in the U.S.Congress center on

The saying "what's that got to do with the price of tea?" reflects

-Suppose the production possibilities for two countries,producing either food or clothing,are shown in the above figure.They can each produce any linear combination as well.Measuring food on the horizontal axis,the joint production possibility frontier has a vertical intercept of

If a society only cares about efficiency and not equity,then

Employing a general equilibrium approach,describe the effect of a new law that prohibits steel imports.

Suppose two people start with an initial endowment and trade until they obtain a Pareto-efficient allocation with the corresponding price line.What happens when more people who have the same tastes and endowments as the original two traders are included in the Edgeworth box analysis?

Gains from trade will be possible as long as

-The above figure shows a production possibility frontier for a society with two members,Al and Bruce.If point "a" is the efficient product mix,draw a possible Edgeworth box and indifference curves.

Any point on the contract curve is Pareto efficient regardless of the initial endowment.

How does competition ensure that the efficient product mix is attained?

At a perfectly competitive equilibrium with production and trade,the slope of the production possibility curve will be

Explain why Robin Hood's practice of stealing from the rich to give to the poor is never Pareto efficient.

Moving away from the contract curve will

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Considering only the labeled points,point c is a possible equilibrium

Suppose a society's PPF for food (F)and clothing (C)can be written as 25 = F2 + C2.If all consumers have the same endowment and the same utility function Ui = Fi ∗ Ci,what is the efficient product mix of food and clothing?

-Suppose the production possibilities for two countries,producing either food or clothing,are shown in the above figure.They can each produce any linear combination as well.Once free trade is allowed,Canada will produce

Introduction

Supply and Demand

Applying the Supply and Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Suppose a society's PPF for food (F)and clothing (C)can be written as 25 = F² + C².If all consumers have the same endowment and the same utility function U_i = F_i ∗ C_i,what is the efficient product mix of food and clothing?