An allocation is Pareto-efficient if no reallocation of resources would make some people _______ without making others ________?
Correct answer: C. better off; worse off
- A. worse off; worse off
- B. better off; better off
- C. better off; worse off
- D. equal, unequal
Explanation
Pareto efficiency means no feasible reallocation can make at least one person better off without making someone else worse off. This is why the pair is “better off; worse off.”
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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