Exam 10: General Equilibrium and Economic Welfare

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 competitive equilibrium is Pareto efficient because at the competitive equilibrium,

The general-equilibrium analysis of a minimum wage applied to only some sectors of the economy suggests that

There are two consumers in the market,Jack and Jane.Each have some coffee and candies (coffee on the horizontal axis).Jack's MRS of candies for coffee is 3.Jane's MRS of candies for coffee is 3.Which one of the following statements is incorrect?

Every point on the joint production possibilities frontier represents

Any competitive equilibrium is Pareto efficient because with a competitive equilibrium,

Joe and Rita each have some cookies and milk.Joe is willing to trade 2 cookies for an additional ounce of milk.Rita is willing to trade four cookies for an additional ounce of milk.If trading is possible,which of the following is most likely to occur?

If price support policy increases producer surplus more than reducing consumer surplus,then

A general-equilibrium analysis of the impact of a tax on the peanut butter market would include an investigation of the impacts in

For the following, please answer "True" or "False" and explain why. -Any point on the contract curve is Pareto efficient regardless of the initial endowment.

Can it be efficient for one trader to consume all units of the goods while the other trader consumes nothing? In other words,does this point lie on the contract curve?

The First Theorem of Welfare Economics can be expressed as

Suppose a society's PPF for food (F)and clothing (C)can be written as 25 = F² + C².If all consumers have the same endowment and the same utility function Uᵢ = Fᵢ ∗ Cᵢ,what is the efficient product mix of food and clothing?

Consider a society consisting of just a farmer and a tailor.The farmer has 30 units of food but no clothing.The tailor has 60 units of clothing but no food.Suppose each has the utility function U = F^1/3C2/3If the price of clothing is always $1,and the food price is currently $1,then we can conclude

Joe and Rita each have some milk and cookies (Milk on the horizontal axis).Joe's MRS of cookies for milk is two.Rita's MRS of cookies for milk is four.Which of the following statements is TRUE?

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Points a and b

-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.If the endowment is at point a,and Bruce has no ability to bargain,the final allocation will be at point

When the U.S.minimum wage was first passed in 1938,only 56% of workers were employed in covered firms.The incomplete coverage suggests that

-The above figure shows a production possibility frontier for a society with two members,Al and Bruce.If point "a" is the efficient product mix,draw a possible Edgeworth box and indifference curves.

For the following, please answer "True" or "False" and explain why. -At the competitive equilibrium quantity supplied equals quantity demanded in all markets.