A competitive equilibrium is not Pareto efficient if some members of society are unable to afford a necessary good
Indicate whether the statement is true or false
False. The competitive equilibrium described is efficient since all consumers set MRS equal to the price ratio. The problem with the described equilibrium is one of distributive justice not efficiency.
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Jerome has a "C" average in his philosophy course and a "B" average in his economics course. He decides to study an extra hour for his philosophy exam. This is an example of
A) ceteris paribus. B) caveat emptor. C) using assumptions to simplify. D) thinking at the margin.
______________ are events that cause stress, often requiring changes in normal patterns of behavior
a. Disappointments b. Crises c. Sports activities d. Office meetings
The optimal currency area involves a trade-off of reducing transaction costs but the inability to use changes in exchange rates to help ailing regions. If the US, Canada, and Mexico had one single currency (the Peso-Dollar) we would tend to see all of the following EXCEPT:
a. Even more intraregional trade of goods across the three countries. b. Lower transaction costs of trading within North America. c. A greater difficulty in helping Mexico as you can no longer deflate the Mexican peso. d. Less migration of workers across the three countries. e. An elimination of correlated macroeconomic shocks across the countries.
If the United States imposed higher tariffs and more restrictive quotas that reduced imports,
What will be an ideal response?