Game Activity

1. In an economy, there are two individuals, Alex and Brando. Alex utility is maximized, but Brando utility is not. Is this situation considered Pareto Efficient?

• Yes

• No

• It depends on the specific utilities

• No correct Answer

2. Maria and Chris engage in a voluntary trade that makes both of them better off without making anyone worse off. Has a Pareto efficiency occurred?

• Yes

• No

• It depends on the situation

• No correct answer

3. In a society, resources are distributed in such a way that it is impossible to reallocate them to make one person better off without making someone else worse off. Is this situation Pareto efficient?

• Yes

• No

• It depends upon the situation

• No correct answer

3. In a market, if the price of a good increases and the quantity demanded for the good decreases, what can be said about the price elasticity of demand?

• It is elastic

• It is inelastic

• It is unitary elastic

• It depends on the specific situation

4. What is the term used to describe the situation where a firm is producing at the lowest possible cost?

• Allocative efficiency

• Productive efficiency

• Economic efficiency

• None of the above

5. If the government imposes a price floor in a market, what is the likely effect on the quantity of the good traded?

• It will increase

• It will decrease

• It will remain the same

• It depends on the specific market

6. What happens to consumer surplus when the price of a good decreases?

• It increases

• It decreases

• It remains the same

• It depends on the specific market

7. When the demand for a good is perfectly inelastic, how does a change in price affect the quantity demanded?

• It increases

• It decreases

• It remains the same

• It depends on the specific market

8. What is the term used to describe the situation where a firm is producing at the highest possible output level?

• Allocative efficiency

• Productive efficiency

• Economic efficiency

• None of the above

9. In a market, if the price of a good decreases and the quantity demanded for the good increases, what can be said about the price elasticity of demand?

• It is elastic

• It is inelastic

• It is unitary elastic

• It depends on the specific situation