When We Add Just One More Agent of Each Type

question 10

Multiple Choice

When we add just one more agent of each type to an economy, the equilibrium of the trading process will now guarantee that traders of all types benefit in the sense of achieving final utility levels strictly _______________ the ones they could obtain if they remained at their no-trade allocations.

• A) equal to
• B) greater than
• C) less than

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Definitions:

Cell Phones

Mobile electronic devices that allow for telecommunications over long distances without a wired connection.

Herring

A small, silver-colored fish found in the North Atlantic and Pacific Oceans, important for food and as bait in commercial fishing.

Opportunity Cost

The value of the alternative sacrificed when choosing one option over another.

Oranges

A citrus fruit that is a rich source of Vitamin C and is grown in warm climates worldwide, often consumed raw or as juice.