1. The First Theorem of Welfare Economics can be expressed as A) the competitive equilibrium results only when no transactions costs exist. 3) the competitive equilibrium does not involve reallocation of endowments. ) any efficient allocations can be achieved by competition. D) the competitive equilibrium is efficient. 2. The general-equilibrium analysis of a minimum wage applied to only some sectors of the economy suggests that A) workers in all sectors will face increased wages. 3) some workers in the covered sectors will lose their jobs and remain unemployed. C) some workers originally employed in the covered sectors will move to the uncovered sectors, driving down wages in the uncovered sectors. )) all workers will be worse off. 3. Moving away from the contract curve will A) harm both parties. 3) harm only one of the parties. C) harm at least one of the parties. D) ham neither of the parties. 4. When considering trade of two goods between two people, if one person has all the endowment of both goods, this allocation A) is never on a contract curve. 3) will result in trade so each person has all of one good. ) will result in trade to a equal division of goods between the two people. D) is Pareto efficient. 5. When two people are on the contract curve, the allocation of goods 4) cannot be improved. 3) is pareto efficient. c) is such that neither individual can be made better off without making the other worse off. )) All of the above. 6. Competition results in the efficient product mix because A) producers are setting MRT equal to minus the price ratio while consumers are setting MRS equal to minus the price ratio ensuring that MRT will equal MRS. 3) consumers are on the contract curve. C) the slope of the production possibility frontier will equal the slope of the contract curve. D) the distribution of the final output is Pareto efficient.
1. The First Theorem of Welfare Economics can be expressed as A) the competitive equilibrium results only when no transactions costs exist. 3) the competitive equilibrium does not involve reallocation of endowments. ) any efficient allocations can be achieved by competition. D) the competitive equilibrium is efficient. 2. The general-equilibrium analysis of a minimum wage applied to only some sectors of the economy suggests that A) workers in all sectors will face increased wages. 3) some workers in the covered sectors will lose their jobs and remain unemployed. C) some workers originally employed in the covered sectors will move to the uncovered sectors, driving down wages in the uncovered sectors. )) all workers will be worse off. 3. Moving away from the contract curve will A) harm both parties. 3) harm only one of the parties. C) harm at least one of the parties. D) ham neither of the parties. 4. When considering trade of two goods between two people, if one person has all the endowment of both goods, this allocation A) is never on a contract curve. 3) will result in trade so each person has all of one good. ) will result in trade to a equal division of goods between the two people. D) is Pareto efficient. 5. When two people are on the contract curve, the allocation of goods 4) cannot be improved. 3) is pareto efficient. c) is such that neither individual can be made better off without making the other worse off. )) All of the above. 6. Competition results in the efficient product mix because A) producers are setting MRT equal to minus the price ratio while consumers are setting MRS equal to minus the price ratio ensuring that MRT will equal MRS. 3) consumers are on the contract curve. C) the slope of the production possibility frontier will equal the slope of the contract curve. D) the distribution of the final output is Pareto efficient.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Please solve these multiple questions. These are very important to me... THANK YOU!!!
Transcribed Image Text:Multiple Choice Questions
1. The First Theorem of Welfare Economics can be expressed as
A) the competitive equilibrium results only when no transactions costs exist.
B) the competitive equilibrium does not involve reallocation of endowments.
C) any efficient allocations can be achieved by competition.
D) the competitive equilibrium is efficient.
2. The general-equilibrium analysis of a minimum wage applied to only some sectors of
the economy suggests that
A) workers in all sectors will face increased wages.
B) some workers in the covered sectors will lose their jobs and remain unemployed.
C) some workers originally employed in the covered sectors will move to the uncovered
sectors, driving down wages in the uncovered sectors.
D) all workers will be worse off.
3. Moving away from the contract curve will
A) ham both parties.
B) harm only one of the parties.
C) harm at least one of the parties.
D) ham neither of the parties.
4. When considering trade of two goods between two people, if one person has all the
endowment of both goods, this allocation
A) is never on a contract curve.
B) will result in trade so each person has all of one good.
C) will result in trade to a equal division of goods between the two people.
D) is Pareto efficient.
5. When two people are on the contract curve, the allocation of goods
A) cannot be improved.
B) is pareto efficient.
C) is such that neither individual can be made better off without making the other worse off.
D) All of the above.
6. Competition results in the efficient product mix because
A) producers are setting MRT equal to minus the price ratio while consumers are setting MRS
equal to minus the price ratio ensuring that MRT will equal MRS.
B) consumers are on the contract curve.
C) the slope of the production possibility frontier will equal the slope of the contract curve.
D) the distribution of the final output is Pareto efficient.
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