In the absence of externalities, which of the following is true of economic efficiency?
a. It occurs where marginal costs of production equal marginal benefits of consumption.
b. It occurs where quantity supplied is equal to quantity demanded.
c. It maximizes the total net benefits to consumers and producers.
d. All of the above.
e. None of the above.
Ans: d. All of the above.
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If the world terms of trade for a country are somewhere between the domestic cost ratio of H and that of F, then
A) country H but not country F will gain from trade. B) country H and country F will both gain from trade. C) neither country H nor F will gain from trade. D) only the country whose government subsidizes its exports will gain. E) country F but not country H will gain from trade.
To assure a well-defined solution to the consumers' intertemporal choice problems, we must assume that consumers' preferences exhibit the properties that
A) consumers are all identical and that more is always preferred to less. B) more is preferred to less and that consumers prefer diversity. C) consumers like diversity and that more is sometimes preferred to less. D) more is sometimes preferred to less and that first-period consumption and second-period consumption are both normal goods.
How did the gold standard help countries rectify the balance of payment problem? What were the problems associated with the gold standard?
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What will be an ideal response?What will be an ideal response?