An outcome is Pareto efficient if:
A) an individual can be made better off without making someone else worse off.
B) benefits of the outcome are equally distributed among all the participants.
C) no individual can be made better off without making someone else worse off.
D) costs of the outcome are equally shared by all the participants.
C
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A constant-cost industry
A) is one in which an increase in demand is matched by a proportional increases in long-run supply. B) generates increasing profits whenever demand increases because the new long-run equilibrium price is above the old price even though average costs have not changed. C) has a horizontal long-run supply curve. D) has a downward sloping long-run supply curve.
Refer to the graph below. Assume that D1 and S1 are the initial demand for and supply of dollars. Now suppose that Great Britain increases its imports of American products. Assuming freely floating exchange rates:
The graph below shows the supply and demand curves for dollars in the pound/dollar market.
A. The pound price of dollars will fall to 1/5 pound equals $1
B. The pound price of dollars will rise to 1/4 pound equals $1
C. The dollar price of pounds will increase to $5 equals 1 pound
D. A dollar shortage of MN will result in Britain