In order for a central planner to achieve the invisible-hand type efficiency of a free market, the planner would

A. need masses of statistics.
B. be required to makes enormous calculations.
C. need to be able to measure a consumer’s marginal utility in order to equate MU with MC.
D. All of the above would be required.


Answer: D

Economics

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An increase in the value of the marginal product of labor has the effect of increasing the

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? In Exhibit 3-16, if the market price of chairs is initially $15, a movement toward equilibrium would require:   

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There are three goods you are interested in purchasing, X, Y and Z. You notice that the price of Z has fallen. Given that the cross price elasticity between Z and Y is ?1.5; the cross price elasticity between Y and X is 3.0, and the cross price elasticity between Z and X is 0.50. It would make sense that:

A. Z and X are complements; Y and X are substitutes. B. Y and X are substitutes; Y is complementary to Z. C. X and Z are unrelated; Y is complementary to X. D. X and Z are complements; Y and Z are substitutes.

Economics