How is a potentially efficient change different from a Pareto optimal change?
What will be an ideal response?
For a potentially efficient change, benefits must exceed costs; however, some people can be made worse off as a result. In a Pareto optimal solution, no party is made worse off due to a change.
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Skis and snowboards are close substitute goods. A ________ in the price of snowboards would tend to ________ the demand for ________
A) rise; increase; snowboards B) rise; decrease; snowboards C) rise; decrease; skis D) rise; increase; skis E) fall; increase; snowboards
Which statement is true?
A. There is no evidence whatsoever to support the contention that women, blacks, Hispanics, and other minorities are victims of employment discrimination. B. The relatively lower wages earned by women and minorities can be explained entirely by employment discrimination. C. The poverty of women, blacks, and Hispanics can be explained almost entirely by their low earnings. D. None of these statements are true.
A basic understanding of economics is needed to be an informed citizen.
Answer the following statement true (T) or false (F)
Refer to Scenario 9.8 below to answer the question(s) that follow. SCENARIO 9.8: Investors put up $1,040,000 to construct a building and purchase all equipment for a new gourmet cupcake bakery. The investors expect to earn a minimum return of 10 per cent on their investment. The bakery is open 52 weeks per year and sells 900 cupcakes per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The bakery charges $8 on average per cupcake.Refer to Scenario 9.8. The bakery is making ________ economic profits per week.
A. negative B. positive C. break-even D. zero