Question 1

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 2

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 3

In a competitive marketplace,prices adjust until

Accepted Answer

A) MRS's are equal to zero. 
B) excess supply equals excess demand equals zero in all markets. 
C) each consumer has maximized utility subject to his budget constraint. 
D) all firms earn zero profit. 
A) MRS's are equal to zero. 
B) excess supply equals excess demand equals zero in all markets. 
C) each consumer has maximized utility subject to his budget constraint. 
D) all firms earn zero profit.

Question 4

The First Theorem of Welfare Economics can be expressed as

Accepted Answer

A) the competitive equilibrium results only when no transactions costs exist. 
B) the competitive equilibrium does not involve reallocation of endowments. 
C) any efficient allocations can be achieved by competition. 
D) the competitive equilibrium is efficient. 
A) the competitive equilibrium results only when no transactions costs exist. 
B) the competitive equilibrium does not involve reallocation of endowments. 
C) any efficient allocations can be achieved by competition. 
D) the competitive equilibrium is efficient.

Question 5

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

Accepted Answer

When Robin steals fr

Question 6

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 7

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Point a is NOT Pareto efficient because

Accepted Answer

A) Al's MRS exceeds Bruce's MRS. 
B) the point is not near the center of the box. 
C) Al's indifference curve is not far enough away from the origin. 
D) All of the above. 
A) Al's MRS exceeds Bruce's MRS. 
B) the point is not near the center of the box. 
C) Al's indifference curve is not far enough away from the origin. 
D) All of the above.

Question 8

-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 kink because

Accepted Answer

A) each country has a constant marginal rate of transformation that differs from the other country. 
B) each country has a marginal rate of transformation that varies with the product mix. 
C) all production possibility frontiers have kinks. 
D) the two countries have the same marginal rate of transformation. 
A) each country has a constant marginal rate of transformation that differs from the other country. 
B) each country has a marginal rate of transformation that varies with the product mix. 
C) all production possibility frontiers have kinks. 
D) the two countries have the same marginal rate of transformation.

Question 9

The fact that any pareto efficient equilibrium can be achieved through competition by adjusting endowments is called

Accepted Answer

A) the second welfare theorem. 
B) the first welfare theorem. 
C) the third welfare theorem. 
D) That is not possible. 
A) the second welfare theorem. 
B) the first welfare theorem. 
C) the third welfare theorem. 
D) That is not possible.

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

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

In a competitive marketplace,prices adjust until

The First Theorem of Welfare Economics can be expressed as

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

Any policy change that results in a Pareto-superior allocation

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Point a is NOT Pareto efficient because

-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 kink because

The fact that any pareto efficient equilibrium can be achieved through competition by adjusting endowments is called

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 10: General Equilibrium and Economic Welfare

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

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

In a competitive marketplace,prices adjust until

The First Theorem of Welfare Economics can be expressed as

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

Any policy change that results in a Pareto-superior allocation

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Point a is NOT Pareto efficient because

-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 kink because

The fact that any pareto efficient equilibrium can be achieved through competition by adjusting endowments is called

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters