A decision made by a rational person
A. would always make the person wealthier.
B. is intended to make the person better off.
C. is intended to make the person worse off.
D. is identical to a decision that would be made by any other person facing the same choices.
Answer: B
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The downward-sloping part of the long-run average total cost curve is a result of: a. economies of scale
b. diseconomies of scale. c. constant returns to scale. d. diminishing marginal returns.
According to the second welfare theorem
A. equity cannot be analyzed in the Edgeworth box model because it shows only possible trades toward efficiency. B. the welfare of individuals is not based on material goods. C. the issues of equity and efficiency are separate in that the system can be on the contract curve but might not be considered equitable. D. when an allocation is efficient it also achieves equity.