Economic

Identify the following statements as either true or false and explain your reasoning.

1. (2 marks) True or false. There are circumstances when the safety standard could be more efficient

than the efficiency standard.

2.(2 marks) True of false. The Ramsey equation expresses the discount rate as the sum of (1) the

growth rate of the economy and (2) the product of the rate of time preference and the elasticity of

the marginal utility of income.

3. (2 marks) True of false. Weak sustainability can be measured in two ways: Pareto efficiency and

the IPAT equation.

4. (2 marks) True of false. The golden rule of growth says that profit-maximising firms should

equate the maximum sustainable yield to the discount rate.