The fact that any pareto efficient equilibrium can be achieved through competition by adjusting endowments is called
A) the second welfare theorem.
B) the first welfare theorem.
C) the third welfare theorem.
D) That is not possible.
A
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If for any given inflation rate, the federal government lowered taxes, ________
A) it would have a similar qualitative result on output as an increase in government purchases B) it would raise disposable income leading to higher consumption spending C) the aggregate demand curve would shift to the right D) all of the above E) none of the above
Use the figure below, and the regular percentage change formula, to answer the following question: 
Assume that price decreases from $10 to $2. The price elasticity of supply is about
A. 0.35 and supply is inelastic. B. 1 and supply is unit-elastic C. 4 and supply is elastic. D. 1.25 and supply is elastic.