Use the following table to answer questions 49 and 50. Reservation Prices and Costs in Econland for a Widget Reservation Cost to price for one widget $18 D make oneS person D1 widget $2 person S1 D2 16 4 S2 D3 14 6 S3 D4 12 8 S4 D5 10 10 S5 D6 8 12 S6 D7 6. 14 S7 D8 4 16 S8 D9 2 18 S9 D10 20 S10 49. The table above provides reservation prices and costs of the inhabitants of Econland. Suppose we have an allocation where D7 consumes a widget but D1 does not. This is not Pareto Efficient because: a. D1 could give D7 $1 for the widget, and both are better off b. D1 could give D7 $10 for the widget, and both are better off c. D1 could give D7 $20 for the widget, and both are better off d. D1 could give D7 $5 for the widget, and both are better off e. None of the above 50. Suppose we have an allocation where S1, S2, S3, S4 and S5 produce a widget, and D1, D2, D3, D4 and D5 consume a widget. a. This is not Pareto efficient because we can have S9 sell to D1 for $18, S8 sell to D2 for $16, S7 sell to D3 for $14 and so on until S1 sell to D1 for $2 and this is a Pareto improvement b. This is not Pareto efficient because S6 could sell a widget to D6 for $10 and both would be better off c. This is not Pareto efficient because the principle of efficient production is violated d. This is not Pareto efficient because S3 should offer money to S7 and outsource widget production e. None of the above: this IS Pareto efficient
Use the following table to answer questions 49 and 50. Reservation Prices and Costs in Econland for a Widget Reservation Cost to price for one widget $18 D make oneS person D1 widget $2 person S1 D2 16 4 S2 D3 14 6 S3 D4 12 8 S4 D5 10 10 S5 D6 8 12 S6 D7 6. 14 S7 D8 4 16 S8 D9 2 18 S9 D10 20 S10 49. The table above provides reservation prices and costs of the inhabitants of Econland. Suppose we have an allocation where D7 consumes a widget but D1 does not. This is not Pareto Efficient because: a. D1 could give D7 $1 for the widget, and both are better off b. D1 could give D7 $10 for the widget, and both are better off c. D1 could give D7 $20 for the widget, and both are better off d. D1 could give D7 $5 for the widget, and both are better off e. None of the above 50. Suppose we have an allocation where S1, S2, S3, S4 and S5 produce a widget, and D1, D2, D3, D4 and D5 consume a widget. a. This is not Pareto efficient because we can have S9 sell to D1 for $18, S8 sell to D2 for $16, S7 sell to D3 for $14 and so on until S1 sell to D1 for $2 and this is a Pareto improvement b. This is not Pareto efficient because S6 could sell a widget to D6 for $10 and both would be better off c. This is not Pareto efficient because the principle of efficient production is violated d. This is not Pareto efficient because S3 should offer money to S7 and outsource widget production e. None of the above: this IS Pareto efficient
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Use the following table to answer questions 49 and 50.
Reservation Prices and Costs in Econland for a Widget
Reservation
Cost to
price for
one widget
$18
make oneS
widget
$2
person
person
D1
S1
D2
16
4
S2
D3
14
6.
S3
D4
12
8.
S4
D5
10
10
S5
D6
8.
12
S6
D7
14
S7
D8
4
16
S8
D9
18
S9
D10
20
S10
49. The table above provides reservation prices and costs of the inhabitants
of Econland. Suppose we have an allocation where D7 consumes a widget
but D1 does not. This is not Pareto Efficient because:
a. D1 could give D7 $1 for the widget, and both are better off
b. D1 could give D7 $10 for the widget, and both are better off
c. D1 could give D7 $20 for the widget, and both are better off
d. D1 could give D7 $5 for the widget, and both are better off
e. None of the above
50. Suppose we have an allocation where S1, S2, S3, S4 and S5 produce a
widget, and D1, D2, D3, D4 and D5 consume a widget.
a. This is not Pareto efficient because we can have S9 sell to D1 for
$18, S8 sell to D2 for $16, S7 sell to D3 for $14 and so on until S1
sell to D1 for $2 and this is a Pareto improvement
b. This is not Pareto efficient because S6 could sell a widget to D6 for
$10 and both would be better off
c. This is not Pareto efficient because the principle of efficient
production is violated
d. This is not Pareto efficient because S3 should offer money to S7
and outsource widget production
e. None of the above: this IS Pareto efficient
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education