Consider an Edgeworth economy where there are two citizens, Mr. Cortopassi and Ms. Thomas. There are only two goods to be consumed in the economy, Beer and Pretzels. The total amount of Beer is 12 units. The total amount of Pretzels is 12 units. Answer the following: Suppose Mr. Cortopassi has utility for the two goods characterized as U C (B,P) = B + P. Ms. Thomas's utility function is U T (B,P) = B + P. Identify the points that are Pareto efficient.
What will be an ideal response?
Since the MRSs of the two are equal at every point in the Edgewood Box, every point is Pareto.
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If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________
A) rise; decrease B) not change; increase C) fall; increase D) fall; decrease E) rise; increase
According to the above table, if the wage rate is $400 a week and the price of the good produced is $5, the perfectly competitive firm should hire
A) 3 workers. B) 4 workers. C) 5 workers. D) 6 workers.
Assume that the central bank sells government securities in the open market. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and reserve-related (central bank) transactions in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP remains the same and reserve-related (central bank) transactions becomes more negative (or less positive). b. Real GDP falls and reserve-related (central bank) transactions remains the same. c. Real GDP and reserve-related (central bank) transactions remain the same. d. Real GDP rises and reserve-related (central bank) transactions remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
The typical result of an adverse supply shock is
A. falling output accompanied by accelerating inflation. B. falling output accompanied by decelerating inflation. C. rising output accompanied by accelerating inflation. D. rising output accompanied by decelerating inflation.