If only two people are trading their endowments and no production is possible, then the equilibrium they reach will
A) be on their contract curve.
B) result in unequal marginal rates of substitution for the two people.
C) result in one person being worse off than with his or her endowment.
D) All of the above.
A
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In an open economy including the government, planned expenditures equals
A) C + I + G + X + M. B) C + I + G. C) C + I + G - X + M. D) C + I + G + X - M.
Assume goods X and Y are substitutes. An increase in the price of X would cause the demand for Y to increase
Indicate whether the statement is true or false
According to the law of demand, when the price of a BMW or a Gucci purse increases, the quantity demanded of these goods will also increase because consumers consider them prestigious
a. True b. False Indicate whether the statement is true or false
The aggregate expenditure schedule shows how aggregate expenditure in an economy: a. increases as real gross domestic product increases. b. decreases as real gross domestic product increases. c. increases as the inflation rate increases
d. decreases as the interest rate increases.