QUIZ-III-ECO-3203-W2002-solaa

Answer a 8 making use of an economic model is a

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Unformatted text preview: d foreign affairs. Answer: (a) 8) Making use of an economic model is a process of a) solving hundreds of simultaneous equations. b) running experiments to determine how changes in the endogenous variables will change the exogenous variables. c) running experiments to determine how changes in the exogenous variables will change the endogenous variables. d) resolving inconsistencies in the actions of economic agents. Answer: (c) 9) A competitive equilibrium is a state of affairs in which a) markets clear, and output is maximized. b) output is maximized, and all agents are equally well-off. c) all agents are equally well-off and agents are price-takers. d) agents are price-takers, and markets clear. Answer: (d) 10) A relationship that shows the technological possibilities for an economy as a whole is called a: a) production function. b) utility possibilities frontier. c) production possibilities frontier. d) budget constraint. Answer: (c) 11) The rate at which one good can be converted technologically into another is called a) the marginal rate of transformation. b) the marginal rate of substitution. c) the marginal product of labor. d) rate of conversion. Answer: (a) 3 12) Points on the production possibilities frontier have the property that they a) are inherently unattainable. b) show the maximum amount of leisure that can be consumed for given amounts of goods consumed. c) show the maximum amount of goods that can be consumed for given amounts of government spending. d) show the maximum amount of leisure that can be consumed for given amounts of hours worked. Answer: (b) 13) A competitive equilibrium has all of the following properties except a) MPN = slope of PPF b) MRSl,C = MRTl,C c) MRTl,C = MPN d) MPN = w Answer: (a) 14) A competitive equilibrium is Pareto optimal if there is no way to rearrange or to reallocate goods so that a) anyone can be made better off. b) no one can be made worse off. c) someone can be made better off without making someone else worse off. d) someone can be made better off without making everyone else worse off. Answer: (c) 15) A Pareto optimum requires all of the following except a) MPN = − slope of PPF b) MRSl,C = MRTl,C c) MRTl,C = MPN d) MPN = w Answer: (d) 16) Much of the writings of Adam Smith are in close agreement with a) the necessity of trade restrictions. b) the first fundamental theorem o...
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This document was uploaded on 03/03/2014.

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