Under a Pareto Optimum
A) it is always possible to improve someone's welfare.
B) it is never possible to improve someone's welfare.
C) one can only reduce someone's welfare.
D) it is impossible to reduce someone's welfare.
C
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An economy's total labor income is $2 trillion, and total capital income is $1 trillion. In the Cobb-Douglas production function, the exponent on capital is ________
A) two-thirds B) one-half C) one-third D) 0.3 E) none of the above
The view that well-organized producer groups expect to profit from economic regulation and therefore, persuade public officials to impose restrictions that existing producers find attractive is called?
a. social regulation b. public interest regulation c. special interest regulation d. anti-trust regulation
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.
Refer to the diagram and assume the economy initially is in equilibrium at point a. Suppose the aggregate demand declines from AD 1 to AD 2 and the economy moves from a to c. In the mainstream view, the resulting decline in the price level need not shift the short-run aggregate supply curve from AS 1 to AS 2 because:
A. supply creates its own demand.
B. nominal wages are (at least for a time) inflexible downward.
C. firms misperceive the price-level decline as being permanent.
D. deflation reduces the purchasing power of the dollar.