If only two people are trading their endowments and no production is possible, then the equilibrium they reach will
A) be on their contract curve.
B) result in unequal marginal rates of substitution for the two people.
C) result in one person being worse off than with his or her endowment.
D) All of the above.
A
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The closer the Lorenz curve is to the diagonal, the more unequal the distribution of income
Indicate whether the statement is true or false
Which of the following statements is true?
A) The long-run aggregate supply (LRAS) curve shows the Real GDP the economy is prepared to supply at different price levels, assuming wage rates and all other resource prices have fully adjusted to eliminate a recessionary or inflationary gap. B) Laissez-faire is a government policy of raising aggregate demand in order to eliminate a recessionary gap. C) An economy can operate beyond its physical PPF, but not beyond its institutional PPF. D) If the economy is self-regulating, it is always in long-run equilibrium. E) a and c