A situation is efficient if it is:
A. possible to find a transaction that will make at least one person better off, even if others are made worse off.
B. possible to find a transaction that will make at least one person better off without harming others.
C. possible to find a transaction that will make everyone better off.
D. not possible to find a transaction that will make at least one person better off without harming others.
Answer: D
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If two goods, "x" and "y", are perfect substitutes, then which of the following best represents the utility function for the two goods?
A) U = x + y B) U = x ? y C) U = x2 + y2 D) Any of the above.
When the productivity of capital decreases, _____
a. the demand curve for capital shifts to the right b. the price of the good in which capital is used as a resource increases c. the supply curve for capital shifts to the left d. the equilibrium rental rate of capital decreases
In practice, cooperative agreements are:
A) the largest single exchange rate format. B) easy to maintain because they have little impact on the nations. C) often contentious because nations favor their own situations over those of their trading partners. D) impossible to maintain because nations have widely differing systems and values.
A change in which of the following would change the slope of line C?
a. demand
b. marginal propensity to consume
c. investment
d. disposable income