Question 1

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Part of the contract curve can be found by connecting points

Accepted Answer

A)  a and b. 
B)  a and c. 
C)  b and d. 
D)  c and d. 
A)  a and b. 
B)  a and c. 
C)  b and d. 
D)  c and d.

Question 2

Any policy change that results in a Pareto-superior allocation

Accepted Answer

A)  will increase welfare under certain conditions. 
B)  must increase welfare. 
C)  will leave welfare unchanged. 
D)  will have an unpredictable effect on welfare. 
A)  will increase welfare under certain conditions. 
B)  must increase welfare. 
C)  will leave welfare unchanged. 
D)  will have an unpredictable effect on welfare.

Question 3

Joe and Rita each have some cookies and milk.Joe is willing to trade 2 cookies for an additional ounce of milk.Rita is willing to trade 4 cookies for an additional ounce of milk.If trading is possible,which of the following is most likely to occur?

Accepted Answer

A)  Joe will give some milk to Rita in exchange for cookies. 
B)  Rita will give some milk to Joe in exchange for cookies. 
C)  No trade will take place since they both prefer to have more milk and fewer cookies. 
D)  There is not enough information to make any predictions. 
A)  Joe will give some milk to Rita in exchange for cookies. 
B)  Rita will give some milk to Joe in exchange for cookies. 
C)  No trade will take place since they both prefer to have more milk and fewer cookies. 
D)  There is not enough information to make any predictions.

Question 4

-The above figure depicts the Edgeworth box for two consumers,Al and Bruce.Explain why point "a" cannot be a competitive equilibrium.

Accepted Answer

Point "a" cannot be a competitive equili

Question 5

Can consumption efficiency be achieved even if the efficient product mix is not achieved?

Accepted Answer

Efficiency in consumption implies that a

Question 6

When considering trade of two goods between two people,if one person has all the endowment of both goods,this allocation

Accepted Answer

A)  is never on a contract curve. 
B)  will result in trade so each person has all of one good. 
C)  will result in trade to a equal division of goods between the two people. 
D)  is Pareto efficient. 
A)  is never on a contract curve. 
B)  will result in trade so each person has all of one good. 
C)  will result in trade to a equal division of goods between the two people. 
D)  is Pareto efficient.

Question 7

When two people trade their initial endowments to a point on the contract curve,only the level of the endowments will determine the new allocation.

Accepted Answer

A) True 
 B)False

Question 8

A dictator is most likely to

Accepted Answer

A)  adopt a Rawlsian social welfare function. 
B)  maximize her own utility. 
C)  place equal weight on everyone's utility function. 
D)  have nontransitive preferences. 
A)  adopt a Rawlsian social welfare function. 
B)  maximize her own utility. 
C)  place equal weight on everyone's utility function. 
D)  have nontransitive preferences.

Question 9

Assume a government likes a particular equilibrium along the contract curve.It can achieve that equilibrium through competition and income redistribution.

Accepted Answer

A) True 
 B)False

Question 10

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.Derive the contract curve.

Accepted Answer

Let F and C denote the farmer's final al

Question 11

Assume Congress holds a hearing on the impact of gasoline prices on the price of corn.Most likely,this hearing will be

Accepted Answer

A)  a partial equilibrium analysis. 
B)  a general equilibrium analysis. 
C)  about consumer rather than producer surplus. 
D)  an analysis of efficiency. 
A)  a partial equilibrium analysis. 
B)  a general equilibrium analysis. 
C)  about consumer rather than producer surplus. 
D)  an analysis of efficiency.

Question 12

When comparing partial equilibrium effects to general equilibrium effects one can conclude that

Accepted Answer

A)  general equilibrium effects are always larger. 
B)  partial equilibrium effects are always larger. 
C)  the effects are of equal size. 
D)  one cannot determine before the fact which effect is greater. 
A)  general equilibrium effects are always larger. 
B)  partial equilibrium effects are always larger. 
C)  the effects are of equal size. 
D)  one cannot determine before the fact which effect is greater.

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Part of the contract curve can be found by connecting points

Any policy change that results in a Pareto-superior allocation

Joe and Rita each have some cookies and milk.Joe is willing to trade 2 cookies for an additional ounce of milk.Rita is willing to trade 4 cookies for an additional ounce of milk.If trading is possible,which of the following is most likely to occur?

-The above figure depicts the Edgeworth box for two consumers,Al and Bruce.Explain why point "a" cannot be a competitive equilibrium.

Can consumption efficiency be achieved even if the efficient product mix is not achieved?

When considering trade of two goods between two people,if one person has all the endowment of both goods,this allocation

When two people trade their initial endowments to a point on the contract curve,only the level of the endowments will determine the new allocation.

A dictator is most likely to

Assume a government likes a particular equilibrium along the contract curve.It can achieve that equilibrium through competition and income redistribution.

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.Derive the contract curve.

Assume Congress holds a hearing on the impact of gasoline prices on the price of corn.Most likely,this hearing will be

When comparing partial equilibrium effects to general equilibrium effects one can conclude that

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

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Part of the contract curve can be found by connecting points

Any policy change that results in a Pareto-superior allocation

Joe and Rita each have some cookies and milk.Joe is willing to trade 2 cookies for an additional ounce of milk.Rita is willing to trade 4 cookies for an additional ounce of milk.If trading is possible,which of the following is most likely to occur?

-The above figure depicts the Edgeworth box for two consumers,Al and Bruce.Explain why point "a" cannot be a competitive equilibrium.

Can consumption efficiency be achieved even if the efficient product mix is not achieved?

When considering trade of two goods between two people,if one person has all the endowment of both goods,this allocation

When two people trade their initial endowments to a point on the contract curve,only the level of the endowments will determine the new allocation.

A dictator is most likely to

Assume a government likes a particular equilibrium along the contract curve.It can achieve that equilibrium through competition and income redistribution.

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.Derive the contract curve.

Assume Congress holds a hearing on the impact of gasoline prices on the price of corn.Most likely,this hearing will be

When comparing partial equilibrium effects to general equilibrium effects one can conclude that

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