Refer to Scenario 16.2. Is the current distribution Pareto optimal?
A) Yes.
B) No, as Sam could trade Sally a piece of candy for a tee shirt and both people would be better off.
C) No, as Sam could trade Sally a tee shirt for a piece of candy and both people would be better off.
D) Without the prices of each commodity it is impossible to determine if this distribution is Pareto optimal.
A
Economics
You might also like to view...
If firms differ in terms of their technologies, a drop in demand will cause a long run decrease in output price.
Answer the following statement true (T) or false (F)
Economics
An individual who is risk-averse:
A. requires larger compensation when the risk increases. B. never takes risks. C. accepts risk but only when the expected return is very small. D. will accept a lower return as risk rises.
Economics