By restricting foreign lending, a country with sufficient market power can
A. increase world production.
B. lower world interest rates.
C. bid up the rate that foreign borrowers have to pay.
D. bid up the rate that domestic lenders get after taxes.
Answer: C
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A Pareto improvement
a. cannot take place unless a side payment is made b. cannot take place unless a market is perfectly competitive c. cannot occur unless both parties to a transaction enjoy positive net benefits d. will increase the total net benefits available in a perfectly competitive market e. occurs whenever the sum of market consumer surplus and market producer surplus is positive
"The income elasticity of a good is positive if a consumer increases the total spending on that good as a result of an increase in its market price." Do you agree or disagree? Why?
What will be an ideal response?