"Any social planner who implements efficient outcomes will produce the same output in a given market as the competitive market would." In addition to the conditions of the first welfare theorem, which of the following have to hold in order for the statement in quotes to be true?
A. Consumer tastes are quasilinear.
B. Consumer tastes are homothetic.
C. Production frontiers are homothetic.
D. Both (a) and (c).
E. Both (b) and (c).
F. None of the above.
Answer: A
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Refer to Figure 3-1. If the product represented is an inferior good, a decrease in income would be represented by a movement from
A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
The interest rate at which international banks loan to each other is called
A) LIBOR B) federal funds rate C) prime rate D) international bank lending rate
Which of the following can happen?
a. Prices are rising and the inflation rate is negative but rising. b. Prices are falling and the inflation rate is positive and falling. c. Prices are falling and the inflation rate is positive and rising. d. Prices are rising and the inflation rate is positive but falling. e. Prices are rising and the inflation rate is negative and falling.
A monopsonist will hire fewer workers at a lower wage rate than would prevail in a competitive market.
Answer the following statement true (T) or false (F)