Why does perfect competition guarantee a Pareto optimal distribution of goods between two people? Under perfect competition,
A) everyone has the same preferences.
B) everyone faces the same prices.
C) everyone consumes the same quantity of both goods.
D) goods are homogeneous.
B
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People often make economic decisions they later regret, which shows
A) they failed to acquire additional information up to the point where expected marginal benefit equals expected marginal cost. B) they failed to behave rationally. C) they failed to invest as much as they ought to have invested in information. D) none of the above.
In what way is a stronger yen/weaker dollar a burden for Japanese exporters?
A) They received dollars when they sell goods but most of their costs of production are in yen. B) They receive yen when they sell goods but most of their costs of production are in dollars. C) The price of their exports will decline, resulting in lower profits. D) The stronger yen is likely to increase Japanese inflation, resulting in lower profits.
When a person buys stock in a company, that person is buying ________, but when a person buys a bond in a company, that person is ________ the company
A) ownership; borrowing funds from B) ownership; lending funds to C) debt; lending funds to D) debt; borrowing funds from
The marginal product curve:
A. typically decreases at low levels of input, but increases as input increases. B. shows how many extra outputs are created with each additional input. C. cannot be negative, since total output cannot be negative. D. None of these is true.