113 review questions copy

D none of the above 7 gains from trade arise a

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Unformatted text preview: equal to p. B. less than p. C. greater than p. D. None of the above. 7. Gains from trade arise A. whenever a resource is reallocated from a less valued use to a more valued use. B. whenever WTA exceeds WTP. C. whenever resources are valued correctly. D. All of the above. 8. “The distribution of gains from trade is independent of the actual price at which the trade occurs”. True or false? A. True B. False 9. Recall data from Question 2 above. This trade A. constitutes a potential Pareto improvement. B. creates social surplus. C. constitutes a Pareto improvement. D. All of the above. 10. Which of the following is not a definitional property of a perfectly competitive market economy? A. All goods and services can be traded. B. Income is distributed equitably across households. C. Each player is insignificant relative to the market as a whole. D. Buyers and sellers have symmetric information. 11. The first welfare theorem states that A. a Nash equilibrium in a perfectly competitive market economy is welfaremaximizing. B. a Nash equilibrium in a perf...
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This document was uploaded on 03/03/2014.

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