Refer to Scenario 2.2. What is the effect of the BBP on the ...

[rayancarla1]

Refer to Scenario 2.2. What is the effect of the BBP on the equilibrium price of dental care?
 
  A) It unambiguously increases.
  B) It unambiguously decreases.
  C) It increases only if supply shifts more than demand.
  D) It increases only if demand shifts more than supply.

Question 2

Refer to Scenario 16.1. Initially Sam and Sally are allocated 10 cheese doodles and 10 pretzels each. Which of the following statements are TRUE?
 
  A) The initial allocation is Pareto optimal as it is equitable.
  B) The initial allocation is Pareto optimal as Sally and Sam have equal amounts of both goods.
  C) The allocation is not Pareto optimal. An allocation that gave Sam all of the cheese doodles and Sally all of the pretzels would make both of them better off.
  D) The allocation is not Pareto optimal. An allocation that gave Sam four of the cheese doodles and sixteen of the pretzels (leaving Sally the rest) would make both of them better off.

[katheyjon]

Answer to Question 1

A

Answer to Question 2

C