If society were to maximize the utility of its best-off member, the final allocation would be A) perfect equity. B) on the contract curve. C) Pareto efficient. D) one in which one person gets everything. ANSWER D
Date: September 9th, 2020
If government chooses a policy that does not lead to a Pareto improvement, one may say that A) this policy creates only winners. B) this policy creates winners and losers. C) only poor people benefit from this policy. D) this policy only creates losers. ANSWER B
Date: September 9th, 2020
In the long run, the expansion path is A) horizontal. B) vertical. C) diagonal. D) Not enough information. ANSWER D
Date: September 9th, 2020
Suppose the U.S. can produce 10 units of food and 5 units of clothing (or any such linear combination) and Canada can produce 6 units of food and 4 units of clothing (or any such linear combination). If trade occurs between these two countries, which should produce more food and which more clothing? What will […]
Date: September 9th, 2020
If everyone’s utility is given equal weight and a change in resource allocation results in one person’s gain exceeding another person’s loss, we can say that the new allocation A) is Pareto superior to the original one. B) increases social welfare. C) decreases social welfare. D) is efficient. ANSWER B
Date: September 9th, 2020
If society were to maximize the utility of its worst-off member, the final allocation would most likely be A) relatively egalitarian. B) on the contract curve. C) Pareto efficient. D) one in which one person gets everything. ANSWER A
Date: September 9th, 2020
Suppose in a democratic society, all voters prefer choice G over choice B; however, when the two choices are presented along with a third choice, R, B wins the election. This violates the assumption of A) transitivity. B) non-dictatorship. C) independence of irrelevant alternatives. D) completeness. ANSWER C
Date: September 9th, 2020
Explain the difference between fixed costs in the short run and fixed costs in the long run. What will be an ideal response? ANSWER In the short run fixed costs are sunk; in the long run, fixed costs are avoidable.
Date: September 9th, 2020
Economies of scale in nuclear power plants exist because of A) more efficient plant management. B) a better understanding of the plant’s idiosyncrasies, or learning-by-doing. C) nuclear power technology changes. D) both A and B. ANSWER D
Date: September 9th, 2020
A cake is to be shared by two people. Both desire the largest piece possible. One of the two will cut the cake. Under which of the following situations will the cutter adopt a Rawlsian social welfare function? A) The person cutting the cake chooses the first piece. B) The person not cutting the cake […]
Date: September 9th, 2020
