If the Amount You Owe on Your House Is Greater

question 165

Multiple Choice

If the amount you owe on your house is greater than the price of the house,you have

• A)no value to your house.
• B)a mortgage rate that is too high.
• C)negative equity in your house.
• D)a reverse mortgage on your house.

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Definitions:

Edgeworth Box

An Edgeworth Box is a visual representation used in microeconomics to show the distribution of resources or the optimal allocation between two individuals, demonstrating how both can benefit through trade.

Pareto Optimal Allocations

A condition of resource allocation where it's impossible to make any one individual better off without making at least one individual worse off, emphasizing the concept of efficiency in economic distribution without losses.

Edgeworth Box

A model used in economics to show how different allocations of goods or two goods can affect two individuals' utility levels.

Pareto Optimal Allocations

A situation where no reallocation can make someone better off without making someone else worse off, named after economist Vilfredo Pareto.