Multiple Choice
Tom and Jerry have been roommates for the past two years.During this period,they bought 11 CDs together.Now that each is taking his own apartment,they are deciding how to split their possessions.Tom suggests they take five CDs each and give the extra one to Arnold,their neighbor.Jerry,on the other hand,suggests they flip a coin to decide who gets the 11th CD.Assuming they neither like nor dislike being altruistic,which of the two suggestions is Pareto efficient?
A) Tom's suggestion is Pareto efficient.
B) Jerry's suggestion is Pareto efficient.
C) Both suggestions are Pareto efficient.
D) None of the suggestions is Pareto efficient.
Correct Answer:
Verified
Correct Answer:
Verified
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