In real-world markets
a. economic efficiency is rare because making voluntary transactions is difficult
b. economic efficiency is rare because Pareto improvements are difficult to make
c. economic efficiency is best thought of as a continuum
d. perfect competition is an impediment to economic efficiency
e. every possible Pareto improvement is exploited
C
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Refer to Common Property I. Suppose the common property becomes privately owned. The owner behaves competitively and charges people an entrance fee for the right to use the property. In this situation, how are the gains from trade divided between the owner and the users of the property?
a. The owner receives area C + D, and the users receive area A + B. b. The owner receives area C, and the users receive area D. c. The owner receives area E, and the users receive area A + B + C + D. d. The owner receives area C + D, and the users receive zero.
When tax revenues ________ outlays is positive, then the government has a budget ________
A) plus; deficit B) minus; deficit C) minus; surplus D) plus; surplus E) divided by; surplus
Total surplus is represented by the area below the
a. demand curve and above the price. b. price and up to the point of equilibrium. c. demand curve and above the supply curve, up to the equilibrium quantity. d. demand curve and above the horizontal axis, up to the equilibrium quantity.
Mental accounting simplifies the decision-making process because it:
A. limits the calculation of trade-offs. B. eliminates prices from the decision-making process. C. values all purchases equally. D. only weighs benefits and not costs.