Suppose and have to divide a box of chocolates and both of them prefer to have more chocolates to fewer chocolates. An allocation that gives all the chocolates to is
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DSE 2006 Question 1: Welfare economics and social choice
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Suppose A and B have to divide a box of chocolates and both of them prefer to have more chocolates to fewer chocolates. An allocation that gives all the chocolates to A is (A) Pareto inefficient (B) Pareto efficient (C) Pareto unfair (D) Pareto fair
Welfare economics and social choice has come up 62 times in 6 exams since 2004.
What this question tests
This question is on Pareto efficiency and Pareto improvements, part of Welfare economics and social choice in Microeconomics.
What it means for an allocation to be efficient, checked in exchange economies and other settings.
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Question from the DSE 2006 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.