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.
C
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Game theory is:
A. the study of how people behave strategically under different circumstances. B. used by economists to evaluate behavior in a variety of settings. C. a useful tool in predicting strategic behavior. D. All of these statements are true.
Refer to the information provided in Figure 28.1 below to answer the question(s) that follow.
Figure 28.1Refer to Figure 28.1. At wage rate $6, there is a ________ of labor equal to ________ million people.
A. shortage; 180 B. surplus; 180 C. surplus; 60 D. shortage; 60