Which of the following is true within exchange economies:
A. All efficient allocations lie in the set of core allocations.
B. All core allocations are efficient.
C. The set of efficient allocations can be defined without knowing individual 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: F
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Of these policies, which is the best example of constrained discretion?
A) the annual federal budget deficit shall not exceed three percent of the GDP B) the growth rate of the money supply shall be between two percent and five percent C) macroeconomic policies shall promote rapid economic growth and low inflation D) macroeconomic policies shall aim to keep inflation — on average over each five-year interval — within a range of two percent to four percent
The economic theory supporting policies of income redistribution is based on the idea that income increases have ______.
a. equal utility at all incomes b. no utility above the poverty line c. less utility at higher incomes d. less utility at lower incomes
Every time we use scarce resources in one way, we give up the opportunity to use them in other ways.
Answer the following statement true (T) or false (F)
One characteristic of a public good is that it
A) is available for consumption by only a few individuals at any particular time. B) always eliminates the free-rider problem. C) can be consumed simultaneously by many individuals. D) can be easily subdivided into small units.