The fact that any pareto efficient equilibrium can be achieved through competition by adjusting endowments is called
A) the second welfare theorem.
B) the first welfare theorem.
C) the third welfare theorem.
D) That is not possible.
A
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One argument offered by economists for having a Social Security system is that if there were no Social Security, workers might
A. overestimate the value of retirement. B. save too much. C. work too long. D. not fully comprehend how hard it might be to continue working into their 70s.
When the goods of competing companies are identical, consumers have no reason to prefer one product over the other, so the demand curve for each manufacturer will be perfectly elastic.
Answer the following statement true (T) or false (F)
Distinguish between a movement along the aggregate supply curve and a shift of the entire aggregate supply curve. What factors cause each to occur?
Suppose a Dell computer that sells for $2,000 in the U.S. is exported to Canada, where it sells for 2,500 Canadian dollars. Further assume that 1.5 Canadian dollars trade for one U.S. dollar in the foreign exchange market. According to the purchasing power parity theory and the price data for this computer, is the Canadian dollar more likely undervalued, properly valued, or overvalued relative to
the U.S. dollar? a. Undervalued b. Properly valued c. Overvalued d. Cannot be determined from the information given