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
You might also like to view...
A price taker is a firm that
A) seeks to maximize revenue rather than profit. B) cannot influence the market price. C) searches for the best price and then takes the highest profits possible. D) buys inputs for firms.
The law of increasing costs is based on each of the following, except
A. the law of scarcity. B. the law of diminishing returns. C. diseconomies of scale. D. factor suitability.
The OASDI trust fund is projected to sink below zero in ¬¬_____
a. 2012 b. 2021 c. 2033 d. 2045
The manufacturer has put in place a price discrimination policy, where it charges its household customers more per unit than it charges its industrial users. The manufacturer wants to keep the retailer from arbitraging away the profits from the policy. The manufacturer should
a. Vertically integrate into the retail operations in the household market b. Vertically integrate into the retail operations in the industrial market c. Reward the household market retailers for not arbitraging d. All of the above