In free exchange among two individuals the position on the contract curve finally arrived at will, among other things, depend on: I. The bargaining strength of each individual. II. The initial endowments of the individuals. III. The individuals' preferences. Which of these correctly completes the statement?
a. Only III.
b. Only II.
c. I and III, but not II.
d. II and III, but not I.
e. I, II, and III.
e
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Network externalities refer to the situation where the usefulness of a product increases with the number of consumers who use it
Indicate whether the statement is true or false
Pedro buys market basket A that includes 10 books at a price of $20 per book and 10 DVDs at a price of $10 per DVD. Market basket B contains 12 books and 12 DVDs. Based on this information, which of the following statements is NOT true?
A) Revealed preference analysis implies that Pedro only prefers basket B to basket A if basket A is more expensive. B) Pedro prefers market basket B to basket A. C) Market basket B will cost more than basket A. D) If the prices change and Pedro chooses market basket C, which now costs the same as basket B, then basket C is prefer to basket A.
Which of the following terms refers to federal spending and borrowing causing interest rates to rise and business investment to fall?
a. recognition lag b. implementation lag c. legislative lag d. crowding out
One difficulty of computing the value of GDP is that there are no market prices for
a. exports and imports. b. business investments. c. government goods and services. d. resource values.