The main point of the second theorem of welfare economics is that:
A) efficiency is more important than equity.
B) efficiency may be achieved, but equity is not a feasible goal.
C) any attempt to achieve an equitable outcome must occur off the contract curve.
D) any equitable outcome can be achieved by reallocating the resources among the members of a society.
D
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U.S. households wishing to purchase shares of stock in a European company are ________ the foreign exchange market.
A. suppliers of U.S. dollars in B. suppliers of Euros in C. demanders of U.S. dollars in D. supplied Euros by the Fed for use in
Expected utility is the utility that arises from expected wealth
Indicate whether the statement is true or false
If the marginal physical product (MPP) of the last dollar spent on labor is only half as large as the MPP from the last dollar spent on capital, this firm should
A) increase its use of labor and employ less capital. B) employ more capital. C) increase its use of both labor and capital. D) maintain its current factor utilization pattern.
Positive analysis:
A. is the best way to analyze a policy. B. leads to the best solutions. C. is the only way to analyze a policy. D. examines if the policy actually accomplished its goals.