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A result of welfare economics is that the
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- Find the equilibrium price using the welfare optimization method directly.What assumptions are required for the two fundamental theorems of welfare economics to hold? Are these so strong that the theorems are devoid of practical relevance?TRUE OR FALSE Social welfare indifference curves are useful in discussions about the tradeoffs facing society.
- The utility theory that describes how much of one market basket is preferred to another is called the ____________________. ordinal utility cardinal utility utility-maximizing definitive utilityWhich of the following is true of a Giffen good? It is a particular case of an inferior good where the income effect is greater than the substitution effect and runs counter to it. It is similar to an inferior good, though the income effect is positive and more significant than the substitution effect. It is similar to an inferior good, though the income effect is not as significant for the Giffen good as it is for the inferior good. It is most prevalent in developing economies.Apply marginal utility theory to the paradox of value
- If the minimum wage is set above the equilibrium wage, the quantity of labor supplied by workers is less than the quantity demanded by employers. a. true b. false If the price of a product rises by an amount less than the established tax, the buyers bear the tax. a. true b. false The budget line or budget constraint represents each and every one of the different combinations where we exhaust our budget and reach the same level of satisfaction in any combination. a. true b. false *if you answer correctly you will have a good rate upIf the price of X decreases and this decreases the demand for Y, thenSuppose a person is endowed with Bundle A and the price of X is $10 and the price of Y is $1 on the blue budget line. Group of answer choices If he sells all the good X he is endowed with, he will move from Bundle A to E. If he sells all the good X he is endowed with, he will move from Bundle A to C. If he sells all the good X he is endowed with, he will move from Bundle A to B. If he sells all the good X he is endowed with, he will move from Bundle A to D.
- Q57 Cannabis was legalized in 2017 Canada. Assume that the price of cannabis (C) (measured on the horizontal axis) is $9 per ounce and the price of liverwort (L) (measured on the vertical axis) is $4 per ounce. If the price of cannabis declines to $6 per ounce, the budget line will: Multiple Choice shift inward on the horizontal axis. touch the indifference curve at its inflection point. be unaffected. shift outward on the vertical axis. shift outward on the horizontal axis.Which of the following statements best describes how individuals maximize their utility given a constraint? a) this can be shown when the budget constraint is tangent to the highest indifference curve b) this can be shown when the budget constraint is tangent to the highest indifference curve well above the contraint c) none of these possible answers make sense d) this can be shown when the budget constraint is tangent to the lowest indifference curve possibleExplain why the Second Fundamental Theorem of Welfare Economics implies that there is no intrinsic trade-off between efficiency and interpersonal equity.
