An allocation of resources is Pareto optimal if
A. no further mutually beneficial exchange is possible.
B. it is possible to make everyone else better off.
C. it is possible to make one person better off without making at least some others worse off.
D. it is below the contract curve.
Answer: A
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In 2012 a severe drought raised the price of corn. For a farmer in Canada who harvested a normal crop because the farm was not affected directly by the drought, the increase in the price of corn
A) increases the farmer's producer surplus. B) decreases the farmer's producer surplus. C) does not affect the producer surplus because this change is a movement along the farmer's supply curve and not a shift of the farmer's supply curve. D) increases producer surplus only if the farmer's supply is completely inelastic.
An oligopoly that has two dominant strategies is called a duopoly
a. True b. False Indicate whether the statement is true or false
Most economists believe that classical theory describes the world in the short run but not in the long run
a. True b. False Indicate whether the statement is true or false
Suppose you are choosing between milk and cookies. If the opportunity cost of cookies in terms of milk increases, then the budget curve will
A. shift outward. B. rotate outward. C. rotate inward. D. shift inward.