If the initial distribution of two goods between two people is Pareto optimal, which of the following statements is TRUE?
A) It is possible to reallocate the goods between the two people so as to increase the utility of both people.
B) It is possible to reallocate the goods between the two people so as to increase the utility of one person without decreasing the utility of the other.
C) It is possible to reallocate the goods between the two people so as to increase the utility of one person, but only at the expense of the other person.
D) It is impossible to reallocate the goods between the two people so as to increase either person's utility.
E) none of the above
C
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The above table shows the marginal benefit from submarines for the only two citizens of a country. Submarines are a public good. If submarines cost $25 a piece to produce, who would vote for the purchase of four submarines?
A) both Katie and Bobby B) Katie only C) Bobby only D) nobody
If one allows natural resources to be a factor of production, then it is possible to explain the Leontief Paradox for the United States on the grounds that U.S. imports are natural resource intensive
Indicate whether the statement is true or false