The first fundamental theorem of welfare economics states that
A) under certain conditions, a competitive equilibrium is Pareto optimal.
B) a competitive equilibrium is always Pareto optimal.
C) under certain conditions, a Pareto optimum is a competitive equilibrium.
D) a Pareto optimum is always a competitive equilibrium.
A
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A decrease in equilibrium price and an increase in equilibrium quantity could be brought about by a(n)
a. increase in demand b. decrease in demand c. increase in resource prices d. improvement in production technology e. favorable shift in tastes and preferences
Suppose we were analyzing the pound per Swiss franc foreign exchange market. If Switzerland's risk level rises relative to England and nothing else changes, then
a. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing an appreciation of the Swiss franc. b. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market rises, causing an appreciation of the Swiss franc. c. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate. d. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing a depreciation of the Swiss franc. e. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market falls, causing an uncertain change in the value of the Swiss franc.
Refer to Figure 29.1. At a price of P1 in Figure 29.1, there would be a
A. Shortage measured by the distance Q1 to Q5. B. Surplus measured by the distance Q1 to Q5. C. Shortage measured by the distance Q1 to Q3. D. Surplus measured by the distance Q2 to Q4.
As the volume of waste decreases (holding the amount of paper produced constant), the production cost per ton of paper increases at a decreasing rate because the firm must use increasingly sophisticated abatement equipment to decrease the volume of waste.
Answer the following statement true (T) or false (F)