A good for which the demand falls when income rises
a. demand curve
b. income effect
c. elastic
d. inferior good
Ans: d. inferior good
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$100 is to be divided among two individuals—Mary and Jenna. Which of the following allocations is Pareto efficient?
A) Mary receives $45, and Jenna receives $45. B) Mary receives $20, and Jenna receives $75. C) Mary receives $1, and Jenna receives $99. D) Mary receives $90, and Jenna receives $9.
What is/are the advantage(s) of the gold standard?
(a) The government can print money as required by cyclical fluctuations in domestic markets. (b) Floating exchange rates. (c) It requires monetary discipline. (d) All of the above.
Any competitive equilibrium is Pareto-efficient because, with a competitive equilibrium,
A) the marginal rates of substitution are equal for all consumers. B) the price line is the contract curve. C) mutual gains from trade exist. D) the slope of the price line equals the ratio of the MRS for all consumers.
Wealth is redistributed from creditors to debtors when inflation is
a. high, whether it is expected or not. b. low, whether it is expected or not. c. unexpectedly high. d. unexpectedly low.