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Questions › DSE › DSE 2017 › Q3
2 marks, −0.666666666666667Microeconomics › Welfare economics and social choice › Pareto efficiency and Pareto improvementsModerateabout 3 min

DSE 2017 Question 3: Welfare economics and social choice

An economy has two agents AAA and BBB and two goods xxx and yyy; both agents treat the goods as perfect complements. The total endowment is (4,2)(4,2)(4,2). Which of the following allocations is not Pareto optimal?

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An economy has two agents A and B and two goods x and y; both agents treat the goods as perfect complements. The total endowment is (4,2). Which of the following allocations is not Pareto optimal? (A) A gets (1,1) and B gets (1,1) (B) A gets (2,1) and B gets (3/2,1) (C) A gets (1/2,3/2) and B gets (3,1/2) (D) A gets (3,2) and B gets (0,0)

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.

TestStop has 40 past-paper questions on this subtopic.

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