Pareto optimal policies are almost nonexistent in the real world.
Answer the following statement true (T) or false (F)
True
Almost every policy involves a side effect that hurts someone.
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Tom is buying a quantity of wheat at which the marginal utility (in dollars) exceeds price. He should
A. reduce wheat consumption, thus raising P to the level at which MU = P. B. reduce wheat consumption, thus raising MU to the level at which MU = P. C. increase wheat consumption, thus raising P to the level at which MU = P. D. increase wheat consumption, thus lowering MU to the level at which MU = P.
When majority rule voting is used to determine whether to purchase a public good,
A) the efficient outcome is not assured. B) the median voter gets her way. C) the sum of the marginal benefits is ignored. D) All of the above.
Economic theory suggests that the standard of living of American workers would rise if
a. the minimum wage were doubled. b. the knowledge and skills of workers improved. c. older workers were forced to retire earlier, opening up jobs for younger workers. d. technological setbacks lowered output per worker hour, increasing the number of jobs.
In the provided graph, the equilibrium point in the market is where the S and D curves intersect. At equilibrium, the producer surplus would be represented by the area
A. b + c. B. a + b. C. b. D. b + c + d.