Consider three ways of allocating two goods in a two-person exchange economy. I. Both individuals take prices as given and equilibrium prices are established by an impartial auctioneer. II. One individual can act as a perfect price discriminator and force the other individual to pay a different price for each unit of a good that is traded. III. One individual is a monopolist and can charge the
other individual a single, utility-maximizing price. Which of these situations is efficient?
a. None of them.
b. Only I.
c. I and II, but not III.
d. I and III, but not II.
c
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In the figure above, the curve labeled "W" can be a
A) monopoly's demand curve. B) monopoly's marginal revenue curve. C) perfectly competitive firm's demand curve. D) perfectly competitive firm's marginal revenue curve.
The upward and downward movement of aggregate output produced in the economy is referred to as the
A) roller coaster. B) see saw. C) business cycle. D) shock wave.
According to the text, as compared to rich countries, most of the poor countries do not fare well because:
a. they have no oil. b. the people in these countries have limited property rights. c. access to education in these countries is very limited. d. high tariffs in these countries prevent international trade. e. they do not have any natural resources.
Suppose government expenditures on goods and services increase, transfers are unchanged, and taxes rise by less than the increase in expenditures. These changes in the government's budget cause
a. both the equilibrium interest rate and the equilibrium quantity of loanable funds to fall. b. both the equilibrium interest rate and the equilibrium quantity of loanable funds to rise. c. the equilibrium interest rate to rise and the equilibrium quantity of loanable funds to fall. d. the equilibrium interest rate to fall and the equilibrium quantity of loanable funds to rise.