Refer to Scenario 16.3. Is the current distribution Pareto optimal?
A) Yes.
B) No, as Sam has more of both goods.
C) No, as it is possible to find a way for Sam to sell tee shirts to Sally (and receive candy in return) that would make both of them better off.
D) No, as it is possible to find a way for Sam to sell candy to Sally (and receive tee shirts in return) that would make both of them better off.
E) Without knowing the prices of tee shirts and candy we cannot determine if this distribution is Pareto optimal.
C
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Market prices are
a. conveyors of information. b. determined by the interactions of supply and demand in voluntary exchange. c. indicators of the relative scarcity of resources and products. d. all of the above.
If a society uses the market system, only markets are available to solve all of its problems.
Answer the following statement true (T) or false (F)