Refer to Scenario 16.1. Initially Sam and Sally are allocated 10 cheese doodles and 10 pretzels each. Which of the following statements are TRUE?
A) The initial allocation is Pareto optimal as it is equitable.
B) The initial allocation is Pareto optimal as Sally and Sam have equal amounts of both goods.
C) The allocation is not Pareto optimal. An allocation that gave Sam all of the cheese doodles and Sally all of the pretzels would make both of them better off.
D) The allocation is not Pareto optimal. An allocation that gave Sam four of the cheese doodles and sixteen of the pretzels (leaving Sally the rest) would make both of them better off.
C
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According to the “law” of demand, we would expect
A. the demand curve to be negatively sloped. B. the demand curve to be positively sloped. C. the total quantity demanded by the market to move in the same direction as price. D. marginal utility to increase as quantity demanded increases.
A nation can accelerate economic growth by increasing its production of consumer goods
a. True b. False Indicate whether the statement is true or false
A perfectly price-elastic demand is consistent with which of the following?
a. Inferior goods b. A low cross-price elasticity of demand c. A horizontal demand curve d. Few close substitutes
The voluntary relocation of employable migrants from low-paying nations to high-paying nations reduces:
A. wage rate disparities among nations. B. business or capitalist income in the world. C. labor productivity in the world. D. total wage income in the world.