Suppose Over the Last Year That the Price of Scrap

question 20

Multiple Choice

Suppose over the last year that the price of scrap paper rose from $100 a ton to $108 a ton.Over the same time suppose an overall measure of prices rose from 125 to 130.The

• A)price of scrap paper rose by less than inflation, but this doesn't necessarily mean it became scarcer.
• B)price of scrap paper rose by less than inflation, and this means it became scarcer.
• C)price of scrap paper rose by more than inflation, and this means it became scarcer.
• D)price of scrap paper rose by more than inflation, but this doesn't necessarily mean that it become scarcer.

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Definitions:

Pareto Optimal Allocation

A resource distribution scenario where no individual can be made better off without making at least one individual worse off.

Utility Function

A mathematical representation of how different combinations of goods or services provide levels of satisfaction or utility to an individual.

Initial Endowment

The initial allocation or distribution of resources, goods, or wealth among individuals or entities at the start of an economic experiment or model.

Apples

A type of fruit commonly consumed fresh, cooked, or as juice, recognized for its sweet or tart flavor.