1. Any point on the contract curve is Pareto efficient regardless of the initial endowment. 2. When two people trade their initial endowments to a point on the contract curve, only the level of the endowments will determine the new allocation. 3. 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? 4. A competitive equilibrium is not Pareto efficient if some members of society are unable to afford a necessary good. 5. At the competitive equilibrium quantity supplied equals quantity demanded in all markets. 6. Equity and efficiency can be achieved simultaneously through competition. 7. If the monopoly's demand curve intersects the AVC curve at minimum AVC, the firm will shut down. 8. Since there are no close substitutes for the monopoly's product, the monopoly can charge any price it wishes.

1. Any point on the contract curve is Pareto efficient regardless of the initial endowment. 2. When two people trade their initial endowments to a point on the contract curve, only the level of the endowments will determine the new allocation. 3. 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? 4. A competitive equilibrium is not Pareto efficient if some members of society are unable to afford a necessary good. 5. At the competitive equilibrium quantity supplied equals quantity demanded in all markets. 6. Equity and efficiency can be achieved simultaneously through competition. 7. If the monopoly's demand curve intersects the AVC curve at minimum AVC, the firm will shut down. 8. Since there are no close substitutes for the monopoly's product, the monopoly can charge any price it wishes.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.5P

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