According to the General Equilibrium Model, an economically efficient allocation of resources occurs when
A. no welfare-improving trades can be made.
B. the producer's MRT = the consumer's MRS.
C. all consumers have the same MRS.
D. All of these exist.
Answer: D
You might also like to view...
Decreases in the value of existing assets are called:
A. capital losses. B. investment. C. capital gains. D. saving.
Suppose the Fed purchases $100 million of U.S. securities from security dealers. If the reserve requirement is 20 percent, the currency holdings of the public are unchanged, and banks have zero excess reserves both before and after the transaction, the total impact on the money supply will be a:
A. $100 million decrease in the money supply. B. $100 million increase in the money supply. C. $200 million increase in the money supply. D. $500 million increase in the money supply.
What is the difference between accounting profits and economic profits? Which of the two concepts is more appropriate for explaining decisions made by entrepreneurs? Explain
What will be an ideal response?
A lower real interest rate typically induces consumers to:
A. Save more B. Buy fewer imported goods C. Purchase more goods that are bought using credit D. Purchase fewer goods that are bought without using credit