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Questions and Answers
An endowment refers to ____.
An endowment refers to ____.
- A set of property rights
- A diversified portfolio
- An initial distribution of goods
- The bundle of resources a person has at the beginning of an exchange (correct)
Andrew's marginal rate of substitution of hamburgers for fish sticks is 6 while Betty's is 2. Both Andrew and Betty could be made better off if:
Andrew's marginal rate of substitution of hamburgers for fish sticks is 6 while Betty's is 2. Both Andrew and Betty could be made better off if:
- Andrew trades between two and six of his allotment of hamburgers with Betty for a fish stick (correct)
- Andrew gives all of his hamburgers to Betty for all of her fish sticks
- They do not trade and keep their present allotment of hamburger and fish sticks
- Andrew trades between two and six of his allotment of fish sticks with Betty for a hamburger
In an Edgeworth box diagram, if the two consumers' indifference curves intersect at point A then:
In an Edgeworth box diagram, if the two consumers' indifference curves intersect at point A then:
- Voluntary exchange will not change the distribution
- The consumers' MRS's differ
- There is no information to determine
- Point A is on the contract curve (correct)
Which of the following is NOT a characteristic of an endowment?
Which of the following is NOT a characteristic of an endowment?
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If Andrew's marginal rate of substitution of hamburgers for fish sticks is 6 and Betty's is 2, which of the following statements is true?
If Andrew's marginal rate of substitution of hamburgers for fish sticks is 6 and Betty's is 2, which of the following statements is true?
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