Imagine a simple economy with only two people, Leroy and Percy. If the Social Welfare Function is W = U L + U P , and the Utility Possibilities Frontier is UPF = U L + 2U P , what will be the societal optimum?
The optimum would be a corner solution found the same way as if goods were perfect
substitutes. Percy receives none, and all goes to Leroy.
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Compared to the situation before international trade, after the United States imports a good production in the United States ________ and consumption in the United States ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Assuming that the average duration of its assets is four years, while the average duration of its liabilities is three years, then a 5 percentage point increase in interest rates will cause the net worth of First National to ________ by ________ of
the total original asset value. A) decline; 5 percent B) decline; 10 percent C) decline; 15 percent D) increase; 20 percent
In New Zealand one worker can produce 40 walking sticks or 10 boomerangs each hour. What is the opportunity cost of producing one walking stick?
a. 40 boomerangs b. 10 boomerangs c. 4 boomerangs d. 1/4 of a boomerang e. 1/2 worker
In differentiating between the short-run and long-run elasticities for the same good, when economists talk about short-run elasticities,
a. they cannot distinguish between the two types b. there is no differentiation if it's the same good c. they are the same as long-run elasticities for the same good d. they are usually higher than long-run elasticities e. they are usually lower than long-run elasticities