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Author Question: If the initial distribution of labor and capital is Pareto optimal, which of the following ... (Read 121 times)

SO00

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on: Jul 1, 2018
If the initial distribution of labor and capital is Pareto optimal, which of the following statements is TRUE?
 
  A) It is possible to reallocate labor and capital across industries so as to increase the production of one good without decreasing the production of another good.
  B) It is possible to reallocate labor and capital across industries so as to increase the production of one good, but only by reducing the production of another good.
  C) It is possible to reallocate labor and capital across industries so as to increase the production of every good.
  D) none of the above

Question 2

Which one of the following statements is a common criticism of the original Bertrand duopoly model?
 
  A) Firms never choose optimal prices as strategic variables.
  B) Firms would more naturally choose quantities if goods are homogenous.
  C) The assumption that market share is split evenly between the firms is unrealistic.
  D) A and B are correct.
  E) B and C are correct.


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ladyjames123

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Reply #1 on: Jul 1, 2018
Answer to Question 1

B

Answer to Question 2

E


SO00

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Reply 2 on: Jul 1, 2018
Great answer, keep it coming :)

aliotak

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Reply 3 on: Yesterday
Excellent

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