Author Question: Which of the following is true at the exchange equilibrium between two individuals? A) Their ... (Read 47 times)

Evvie72 · **on:** Jul 1, 2018

Which of the following is true at the exchange equilibrium between two individuals?

A) Their marginal rates of substitution are equal.
B) The slopes of the individuals' indifference curves are equal.
C) Both individuals' marginal rates of substitution are equal to the ratio of the prices of the goods.
D) A and B only
E) A, B, and C are all true.

Question 2

Refer to Figure 9.4. If the government establishes a price floor of 40 and government purchases the surplus over quantity demanded, the resulting deadweight loss will be

A) 15.
B) 10 widgets.
C) 1,050.
D) 1,200.
E) 2,400.