Suppose two people start with an initial endowment and trade until they obtain a Pareto-efficient allocation with the corresponding price line
What happens when more people who have the same tastes and endowments as the original two traders are included in the Edgeworth box analysis? A) The price line does not change.
B) The price line becomes flatter.
C) The price line becomes steeper.
D) The price line shifts up or down depending upon how many of each type of trader is included in the analysis.
A
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Refer to Figure 2-1. ________ is (are) unattainable with current resources
A) Point A B) Point B C) Point C D) Points A and C
A bank can only loan out its excess reserves
Indicate whether the statement is true or false
Which of the following is an illustration of the backward-bending supply curve? a. Alex Maxwell is cutting down on the number of hours he works a week because the wage rate he receives has increased
b. Tim Duncan's wage rate is so high that he cannot stop working (playing professional basketball) even though he would like to retire. c. The more Patrick Roy works, the higher is his opportunity cost. d. Steve Hymer quits work because he feels that the employer is paying him a wage rate below his MRP. e. Unskilled workers who do hard (back bending) work earn wages that are considerably below average.
Many states charge a 10-cent deposit on every can of soda sold. A purchaser pays an extra 10 cents per can and will get his or her money back by returning the empty can to a store. This policy encourages recycling by
A. lowering the willingness to pay for recycling materials. B. shifting in the demand curve for canned soda. C. raising the opportunity cost of discarding empty cans. D. taxing the production of canned soda.