Given an initial allocation of resources that is off the consumption contract curve, in a perfect market environment without externalities and imperfect information,
A. one can end up at only one spot on the contract curve.
B. both indifference curves could move to a higher level of utility.
C. one can end up at any point on the contract curve.
D. only one of the indifference curves could move to a higher level of utility.
Answer: B
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The above figure shows the market for DVDs. The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs. After this price ceiling is in effect, deadweight loss equals ________
A) $1,600,000 B) $200,000 C) $800,000 D) $1,800,000 E) $400,000
In the short run in the Keynesian model, a sharp increase in oil prices would leave the economy with a ________ level of output and a ________ real interest rate
A) higher; lower B) lower; higher C) lower; lower D) higher; higher
If an economy is operating at a point inside the production possibilities frontier, then
a. some of the nation's resources are unemployed b. the production decisions are made by the government c. unlimited resources must satisfy scarce desires d. there is a scarcity of human resources relative to human wants therefore society must have some mechanism for making choices e. society is paying too much for wages
As a result of the Boston Red Sox's winning the 2007 World Series, it was expected that
A. the demand for Red Sox's tickets would rise in 2008. B. the demand for Red Sox's tickets would fall in 2008. C. the supply for Red Sox's tickets would rise in 2008. D. the supply for Red Sox's tickets would fall in 2008.