You value your favorite shirt at $100. Someone else values it at $80, and that person is willing to pay you $80 for your shirt. Would selling your shirt to this person for $80 be Pareto efficient?
A. No, the person paid you $80 for the shirt so his net benefit was $0, while your net benefit was -$20. For this change to be Pareto efficient, each of you should have the same net benefit.
B. Yes, because any time you engage in trade, the result must be Pareto efficient.
C. Yes, because even though you lose from the trade and he gains, there is the potential for him to compensate you for your loss.
D. No, because both of you are not better off as a result of the trade.
Answer: D
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Refer to Scenario 10-1. Based on the information above, what is the level of public saving?
A) $0 B) $1 trillion C) $2 trillion D) negative $1 trillion (a deficit of $1 trillion)
Nominal GDP is $10,000 billion in 2011, but real GDP is only $9,000. It follows that:
a. the GDP deflator is equal to 111 b. the GDP deflator is equal to 100. c. the GDP deflator is equal to 90. d. prices must have decreased relative to the base year.
In a typical graph for a purely competitive firm, the intersection of the total cost and total revenue curves would be:
A. a break-even point. B. a point of maximum economic profit. C. a point where MR = MC. D. a point of minimum economic loss.
The price for loanable funds is the interest rate.
Answer the following statement true (T) or false (F)