Microeconomics General Equilibrium Quiz Form
Test your understanding of microeconomics general equilibrium concepts. Answer all questions to the best of your ability.
1. What is the definition of general equilibrium in microeconomics?
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2. In a two-good, two-consumer Edgeworth box, what does the contract curve represent?
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All Pareto efficient allocations
All competitive equilibria
All Nash equilibria
All allocations with equal utility
3. Suppose the excess demand for a good is positive. What does this imply about the market?
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Price will rise
Price will fall
The market is in equilibrium
Supply equals demand
4. What condition must hold for a competitive equilibrium to be Pareto efficient?
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5. In the context of a general equilibrium model, what is a Walrasian auctioneer?
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An agent who adjusts prices to clear markets
A government regulator
A consumer maximizing utility
A monopolist setting prices
6. Briefly explain the First Welfare Theorem.
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7. Which of the following is NOT an assumption of the standard general equilibrium model?
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Perfect competition
Complete markets
Increasing returns to scale
Rational consumers
8. What is the function of prices in a general equilibrium model?
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9. If each consumer’s demand equals their endowment at current prices, what can be said about the market?
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The market is in equilibrium
There is excess demand
Prices must fall
Pareto inefficiency exists
10. Provide a brief example of a situation where general equilibrium analysis is necessary instead of partial equilibrium.
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