Which of the following is true of equilibrium?
A) Equilibrium refers to a situation where an economic agent can be made better off without making anyone else worse off.
B) Equilibrium refers to a situation where the government allocates resources among economic agents.
C) Equilibrium refers to a situation where all economic agents are making sub-optimal choices and have an incentive to change behavior.
D) Equilibrium refers to a situation where all economic agents simultaneously optimize after considering each other's actions.
D
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An economic problem with using subsidies or price ceilings to move a monopoly toward the competitive equilibrium is that
a. it may increase monopoly profits. b. it may decrease monopoly profits. c. policy makers may not be able to determine what the competitive equilibrium is. d. policy makers always need to be lobbied before taking any actions.
Refer to Figure 24-2. Ceteris paribus, an increase in the price level would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
A country would tend to experience currency depreciation relative to other countries if: a. the profitability of investments in other countries increases relative to that country
b. people in the foreign currency markets expect the value of the currency to fall in the near future. c. the foreign demand for its exports decreases. d. any of the above occurs.
The connection between domestic saving and investment to the trade balance explains why economists view the balance of trade as a fundamentally __________________ phenomenon.
a. microeconomic b. positive c. negative d. macroeconomic