Which of the following is not a condition required for the first welfare theorem to hold:
A. No government policy interferes with the formation of prices.
B. No market actor has market power.
C. Tastes are quasilinear.
D. Income is distributed fairly before markets open.
E. (a) and (c)
F. (b) and (c)
G. (c) and (d)
H. (b) and (d)
Answer: G
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The Coase Theorem explains how the ________ can come to a socially optimal solution.
A. government B. producers C. citizens D. market
Products are homogenous when:
A. they are identical in the eyes of the purchasers B. some purchasers view the products as different C. suppliers can charge different prices for the same good D. they meet basic safety standards.
When the money market is drawn with the value of money on the vertical axis,
a. money demand slopes upward and money supply is horizontal. b. money demand slopes downward and money supply is horizontal. c. money demand slopes upward and money supply is vertical. d. money demand slopes downward and money supply is vertical.
The primary purpose of antitrust policy in the United States is to
A. Issue patents. B. Encourage competition. C. Regulate monopolies. D. Limit foreign competition.