There are two consumers in the market, Jack and Jane. Each have some coffee and candies (coffee on the horizontal axis). Jack's MRS of candies for coffee is 3. Jane's MRS of candies for coffee is 3
Which one of the following statements is incorrect? A) This allocation is on the contract curve.
B) This can be a competitive equilibrium.
C) This allocation is Pareto efficient.
D) We can reallocate goods so as to make one person better off without harming another.
D
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Assume the interest rate on a current one-year bond is 3%, and the expected interest rate on the one-year bond one year from now is 6%. If the term premium on a two-year bond is 0.5%, then the interest rate on the two-year bond will be
A) 4%. B) 4.5%. C) 5%. D) 6.5%.
In the presence of a negative externality generated by producing a good, a competitive market will produce more of that good than is socially optimal
What will be an ideal response?
Suppose that a more efficient way to produce a good is discovered, thus lowering production costs for the good. This will cause: a. an increase in supply, or a rightward shift of the supply curve
b. a decrease in supply, or a leftward shift of the supply curve. c. an increase in quantity supplied, or a movement down the supply curve. d. a decrease in quantity supplied, or a movement up the supply curve.
A price ceiling set below the equilibrium price is binding
a. True b. False Indicate whether the statement is true or false