Question 1
Correct
Mark 1.00 out of 1.00
For which values of X is State A NOT Pareto-efficient?
State A State B State C State D
Person 1
X
3
4
7
Person 2
5
2
4
3
Person 3
3
6
5
5
Person 4
4
7
5
6
(
Select one or more:
a. X = 5
b. X = 6
c. State A is Pareto-efficient for all possible values of X.
d. X = 8
e. X = 3
f. X = 4
g. X = 7
The correct answer is: State A is Pareto-efficient for all possible values of X.
Question 2
Partially correct
Mark 0.50 out of 1.00
Sarah's utility function is US(x,y) = 5x + 4y
She owns 4 units of x and 6 units of y.
Khalid's utility function is UK(x,y) = 3x + 4y
He owns 7 units of x and 6 units of y.
Sarah suggests they should trade and makes several suggestions.
Select all trades that are Pareto-improvements over the current allocation of goods.
Select one or more:
a. Sarah gets 2 units of X from Khalid, Khalid gets 2 units of Y from Sarah.
b. Sarah gets 3 units of Y from Khalid, Khalid gets 1 unit of X from Sarah.
c. None of these trades are Pareto-improvements.
d. Sarah gets 1 units of Y from Khalid, Khalid gets 3 unit of X from Sarah.
e. Sarah gets 3 units of X from Khalid, Khalid gets 1 unit of Y from Sarah.
f. Sarah gets 1 units of X from Khalid, Khalid gets 3 units of Y from Sarah.
The correct answer is: Sarah gets 2 units of X from Khalid, Khalid gets 2 units of Y from Sarah.
Question 3
Correct
Mark 1.00 out of 1.00
Select all values of X and Z for which State B is a Pareto-improvement over State A.
State
A
B
Person I
X
5
Person II
7
9
Person III
7
6
Person IV
8
Z
Select one or more:
a. X = 6, Z = 7
b. X = 2, Z = 11
c. X = 4, Z = 6
d. State B cannot be a Pareto-improvement over state A, irrespective of X and Z.
e. X = 6, Z = 8
f. X = 8, Z = 8
g. X = 5, Z = 8
h. X = 5, Z = 9
i. X = 6, Z = 9
j. X = 4, Z = 9
The correct answer is: State B cannot be a Pareto-improvement over state A, irrespective of X
and Z.
Question 4
Correct
Mark 1.00 out of 1.00
Which states are Pareto-efficient?
State
A
B
C
Person I
3
6
7
Person II
8
7
7
Person III
5
8
9
Person IV
5
6
7
Select one:
a. Only C
b. A and B
c. Only A
d. None
e. A and C
f. Only B
g. A, B and C
h. B and C
The correct answer is: A and C
Question 5
Correct
Mark 1.00 out of 1.00
There are two people Peter and Mandeep, both own different sorts of goods that they can
exchange if they want to.
They show each other the goods they have and then say whether they are interested in trading
(assume they are rational economic actors that always want trade if it is beneficial to them).
Select all situations that are NOT Pareto-efficient.
Select one or more:
a. Peter does not want to trade with Mandeep, but Mandeep wants to trade with Peter.
b. Peter wants to trade with Mandeep, but Mandeep does not want to trade with Peter.
c. Peter does not want to trade with Mandeep and Mandeep does not want to trade with
Peter.
d. Peter wants to trade with Mandeep and Mandeep wants to trade with Peter.
The correct answer is: Peter wants to trade with Mandeep and Mandeep wants to trade with
Peter.