ECON Q1 , 2

Which economist is the founder of modern economics?

Who says the invisible hand isn’t there?

Who says the invisible hand more prevalent than ever?

Adam Smith

Joseph Stieglitz

Milton Friedman

In a Google Map, the red lines represent roads with traffic congestion. Is this an assumption or an implication of the model?

assumption

Which endowment gives Smith 7 utils of happiness

Between 6 and 8

Which of the following statements apply in an Edgeworth Box exchange model?

1. Allocations within any lens in the box are mutually beneficial

2. The terms of trade is the slope of the line joining the endowment point and the allocation after trade

3. Individuals have incentive to trade if they are at a pareto optimal point

4. The total amounts of each good possessed by the two traders combined are shown by the lengths of the axes

5. The set of all indifference curve tangencies represents all economically efficient allocations and is known as contact curve

6. The shape of the indifference curve is due to more is better assumption

2,4,5

Why do market intermediaries exist?

Adress the challenge associated with imperfect information

Suppose the initial endowment is point A what would be the terms of trade if they went to point G

6/9

To what labeled points could they trade to to show that A is not pareto optimal?

C, E, G