Which of the following is true about exchange economies?
A. All core allocations are efficient.
B. In 2-person exchange economies, the core is equal to the set of efficient allocations that is also mutually beneficial relative to initial endowments.
C. In n-person exchange economies (with n>2), the core is smaller than the set of efficient allocations that is also mutually beneficial relative to initial endowments.
D. (a) and (b) are true.
E. (a) and (c) are true.
F. (b) and (c) are true.
G. All of the above are true.
H. None of the above are true.
Answer: G
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In the foreign exchange market, when the U.S. interest rate rises, the supply of dollars ________ and the foreign exchange rate ________
A) increases; does not change B) decreases; rises C) increases; falls D) increases; rises E) decreases; falls
Under monopolistic competition, there are
A. so many firms that no one can control the price. B. low barriers to entry. C. high barriers to entry. D. identical products.
Why do high fixed costs force firms to shut down temporarily or shut down forever?
What will be an ideal response?
In 2005, the European Union began a program to
A. allow the trading of carbon-dioxide permits among firms. B. reduce greenhouse gas emissions by 10 percent within 5 years. C. eliminate greenhouse gas emissions by 50 percent within 15 years. D. subsidize firms that pollute more than a given limit.