Question 1

When the allocation of resources is Pareto efficient

Accepted Answer

A) society is providing the greatest good to the greatest number. 
B) no consumer would prefer someone else's consumption bundle to his or her own. 
C) it is not feasible to make someone better off without making someone worse off. 
D) it is feasible to make someone better off without making someone worse off.

Question 2

The marginal condition for a Pareto-optimal allocation of factors requires that the ________ between labour and capital be equal for all commodities produced by different firms.

Accepted Answer

A) MRS 
B) MRTS 
C) DMR 
D) MC

Question 3

In Pareto welfare economics, Efficiency in the allocation of factors among commodities is related to

Accepted Answer

A) efficiency in production 
B) efficiency in exchange 
C) efficiency in product-mix 
D) All of the above

Question 4

The locus of the various physically attainable utility combinations of two persons when the factor endowments, state of technology and preference orders of the individuals are given.

Accepted Answer

A) grand utility possibility frontier 
B) Maximum utility frontier 
C) Pareto Optimality frontier 
D) Hicks Utility Frontier

Exam 5: Welfare Economics and Efficiency Allocation

When the allocation of resources is Pareto efficient

The marginal condition for a Pareto-optimal allocation of factors requires that the ________ between labour and capital be equal for all commodities produced by different firms.

In Pareto welfare economics, Efficiency in the allocation of factors among commodities is related to

The locus of the various physically attainable utility combinations of two persons when the factor endowments, state of technology and preference orders of the individuals are given.