Exchange efficiency means a that we can reallocate a

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Review Questions-ch-16

5 .   Let the demand and supply for two linked products , say corn and soy , be the following : Q c d = 12 – 2 p c + p s ; Q c s = 4 + p c ; Q s d = 6 - 4 p s + p c ; Q s s = 4 + p s . The superscript refers to “ demand ” ( d ) or “ supply ” ( s ) and the subscript refers to corn ( c ) or soy ( s ) . Now , suppose that the demand for corn shifts to Q c d = 18 – 2 p c + p s . If the price of soy is free to adjust in response to this shift , what are the new equilibrium prices of corn and soy ?
a ) 
b ) p c = 6.20 ; p s = 2.15
c ) p c = 2.50 ; p s = 2.50
d) p c = 4.35 ; p s = 2.00
Answer:  a )   p c = 5.14 ; p s = 1.43
6 .   According to Walras ’ Law , in a general competitive equilibrium with a total of ____ markets , if supply equals demand in the first _____ markets , then supply will equal demand in the _____ market as well .
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7 .   Exchange efficiency means
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8 .   Two individuals , A and B , consume two goods , x and y . Consumer A initially has 3 units of x and 2 units of y . Consumer B initially has 5 units of x and 6 units of y . B x y x y MRS  . Does this initial allocation of x and y represent an efficient allocation ?
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9 .   Two individuals , A and B , consume two goods , x and y . Together they have 4 units of x and 8 units of y . For Consumer A the 5 3 , A x y x y MRS  and for Consumer B the 3 , B x y x y MRS  . Which of the following allocations is an efficient allocation of goods x and y ?
a) Consumer A has 5 units of x and 3 units of y , and Consumer B has 3 units of x and 1 unit of y .
b) Consumer A has 3 units of x and 5 units of y , and Consumer B has 1 unit of x and 3 units of y .
c) Consumer A has 2 units of x and 6 units of y , and Consumer B has 6 units of x and 2 units of y .
d) Consumer A has 7 units of x and 2 units of y , and Consumer B has 1 unit of x and 6 units of y .
10 .   The input contract curve represents :
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11 .   The marginal rate of transformation where goods X and Y are produced by an economy using capital and labor as inputs equals
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12 .   Exchange efficiency , input efficiency , and substitution efficiency are satisfied when __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___. This result is known as __ _ _ __________.
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Chapter 14 / Exercise 27
Mathematical Applications for the Management, Life, and Social Sciences
Harshbarger
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7.Exchange efficiency means a)that we can reallocate a fixed basket of consumption goods among consumers in a way that makes all consumers better off. b)that we cannot reallocate a fixed stock of inputs among firms so that we can simultaneously expand the output of all goods produced in an economy. c)that we cannot reallocate a fixed basket of consumption goods among consumers in a way that makes all consumers better off. d)that we can reallocate a fixed stock of inputs among firms so that we can simultaneously expand the output of all goods produced in an economy. Ans: C
8.Two individuals, A and B, consume two goods, xand y. Consumer A initially has 3 units of xand 2 units ofy. Consumer B initially has 5 units of xand 6 units of Bxyx yMRS. Does this initial allocation of xyrepresent an efficient allocation? y.
5
,and
.
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Mathematical Applications for the Management, Life, and Social Sciences
The document you are viewing contains questions related to this textbook.
Chapter 14 / Exercise 27
Mathematical Applications for the Management, Life, and Social Sciences
Harshbarger
Expert Verified
.
9.Two individuals, A and B, consume two goods, xand y. Together they have 4 units of xand 8 units of y. For Consumer A the 3,Axyx yMRSand for Consumer B the 3,Bxyx yMRS. Which of the following allocations is an efficient allocation of goods and y5x?
x
.
x
.
x
.
x
.

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