##### Click on the correct option. Text colour will change into green if your chosen option is corret and if it is wrong, it will change into red:

- In an economy of two individuals (A and B) and two commodities (X and Y), general equilibrium of exchange is reached when
- \(MR{T_{xy}} = MR{S_{xy}}\)for A and B
- \(MR{S_{xy}} = {P_x}/{P_y}\)
- \({(MR{S_{xy}})_A} = {(MR{S_x})_B}\)
- all of the above
- The locus of general equilibrium points of exchange in a two-individual, two-commodity economy is called
- the consumption contract curve
- the production contract curve
- the social welfare function
- the transformation curve
- In an economy of two commodities (X and Y) and two factors (L and K), general equilibrium of production is reached when
- \(MRT{S_{LK}} = {P_L}/{P_K}\)
- \(MRT{S_{LK}} = MR{S_{xy}}\)
- \(MR{T_{xy}} = MR{S_{xy}}\)
- \({(MRT{S_{LK}})_x} = {(MRT{S_{LK}})_y}\)
- The transformation curve is derived from
- the consumption curve
- the utility-possibility curve
- the social welfare function
- the production contract curve
- The slope of the transformation curve is given by
- \(MR{T_{xy}}\)
- \(MR{S_{xy}}\)
- \(MRT{S_{LK}}\)
- all of the above
- In an economy of two individuals (A and B) and two commodities (X and Y), general equilibrium of production and exchange occurs when
- \(MR{T_{xy}} = {P_x}/{P_y}\)
- \(MR{S_{xy}}{\rm{ for A and B}} = {P_x}/{P_y}\)
- \({(MR{S_{xy}})_A} = {(MR{S_{xy}})_B}\)
- \(MR{T_{xy}} = {(MR{S_{xy}})_A} = {(MR{S_{xy}})_B}\)
- The distribution of two commodities between two individuals is said to be Pareto optimal if
- one individual cannot be made better off without making the other worse off
- the individuals are on their consumption contract curve
- the individuals are on their utility-possibility curve
- all of the above
- In deriving the utility-possibility curve, we make interpersonal comparisons of utility
- Always
- never
- sometimes
- often
- The locus of Pareto optimality in production and consumption is given by
- the social welfare function
- the utility-possibility curve
- the transformation curve
- the grand utility-possibility curve
- An ethical or value judgment must be made in order to derive
- the transformation curve
- the consumption contract curve
- the grand utility-possibility curve
- the social welfare function
- In a two-commodity (X and Y) and two-individual (A and B) economy, the maximum social welfare is reached at
- any point on the grand utility-possibility curve
- any point on the social welfare function
- the point where the \(MR{T_{xy}} = MR{S_{xy}}\) for A and B
- the point of tangency of the grand utility-possibility curve with a social welfare function
- Perfect competition leads to a point on the grand utility-possibility curve
- Always
- never
- sometimes
- we cannot say

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