Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (2nd Edition)
2nd Edition
ISBN: 9780134641904
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 7, Problem 6P
(a)
To determine
The equilibrium in the market for electric drills is pareto optimal.
(b)
To determine
The pareto efficiency exists in the given situation.
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Students have asked these similar questions
The figure illustrates the rental housing market, where there is an outward shift in the demand curve. In response, the city authority imposes a rent ceiling of €500. Which of the following statements is correct?
Select one:
a.
In the long run, building more houses would remove the need for the rent ceiling.
b.
The market clears at €500 with 12,000 houses.
c.
Removing the rent ceiling leads to an inefficient outcome.
d.
Banning sub-letting makes the outcome Pareto efficient.
When a market is in equilibrium, the economic problem has been solved. Comment on the truth or falsity of the statement.
What is the Samuelson Rule? Why does the market outcome, based on the actions of rational, self-interested individuals will deviate from the results of the Samuelson Rule
Chapter 7 Solutions
Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (2nd Edition)
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Similar questions
- When a market is in equilibrium, which of the following is not correct Select one: a. the price determines which buyers and sellers participate in the market. b. those buyers who value the good more than the price choose to buy the good. c. those sellers whose costs are less than the price choose to produce and sell the good. d. the marginal cost of producing the last unit of the good is equal to consumers' marginal benefit from consuming the last unit e. the opportunity cost of producing the last unit of the good is equal to the absolute advantage of producing it.arrow_forwardWhy is economics often described as the science of constrained choice?arrow_forwardExplain in pictures only, without words on the principles of economics (Theory of demand and supply)arrow_forward
- Let’s assume that a severe hurricane destroys many shrimp farms along the Gulf Coast of Louisiana. The impact on the market for farmed shrimp will be a shift to the left of: Group of answer choices the demand curve, as consumers try to economize because of the shortage. the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price. the supply curve. both the supply and demand curves.arrow_forwardHow does a market reach equilibrium without any outside intervention? Explain your answer.arrow_forwardAn allocation of goods is said to be Pareto-optimal (or Pareto-efficient) if no ____ are possible. A. Pareto-improvements B. Market systems C. Pareto-reductions D. Alfredo-deductionsarrow_forward
- After defining a ‘market mechanism’ and the ‘law of supply and demand’, explain how higher education can be affected by market changes, and how economic theory can understand such changes (Duff, 1997).arrow_forwardOffer an example of a market where you consider the real-world outcome to be unacceptable. Why is the market outcome unacceptable?arrow_forward
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