In the Edgeworth box shown below,  

A. the relative prices shown will bring equilibrium without changing.
B. there is more clothing demanded than is available.
C. there is more food demanded than is available.
D. there is less food demanded than is available.


Answer: C

Economics

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You have invested $1,000 in a stock whose price is increasing at 10 percent a year. Your stock broker, who is never wrong, recommends a stock rising at 20 percent a year. Assuming the broker earns 4 percent of the stock’s value on any purchase or sale of the stock, should you take his or her recommendation?

What will be an ideal response?

Economics

Gross investment is equal to

A) depreciation minus net investment. B) net investment plus capital stock. C) depreciation plus net investment. D) net investment minus capital stock.

Economics

If a firm increases output when MR < MC, then:

a. profit will equal zero. b. profit will increase. c. profit will decrease. d. profit will remain the same. e. the firm is minimizing losses.

Economics

Suppose Gina and Henry play two rounds of the ultimatum game. In the first round they play for $10; in the second round they play for $1,000. In the first round Gina suggests an 80/20 split ($8 to Gina, $2 to Henry), but Henry quickly rejects the offer

as unfair. If in the second round Gina offers the same split ($800 to Gina, $200 to Henry), research by behavioral economists suggests that Henry will: A. accept the offer because the dollar amount he would forgo by rejecting is substantial. B. counteroffer with a more even split. C. weigh the offer much more carefully because of the dollar amounts involved but ultimately reject the offer. D. exhibit a stronger negative reaction than the first time and ultimately reject the offer.

Economics