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Questions › DSE › DSE 2020 › Q29
4 marks, −1Microeconomics › Welfare economics and social choice › Pareto efficiency and Pareto improvementsModerateabout 3 min

DSE 2020 Question 29: Welfare economics and social choice

For the same economy (endowments (0,9)(0,9)(0,9) and (10,0)(10,0)(10,0); u1=u2=min⁡{x,y}u_1=u_2=\min\{x,y\}u1​=u2​=min{x,y}), the allocation that gives (10,9)(10,9)(10,9) to agent 111 and (0,0)(0,0)(0,0) to agent 222 is

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For the same economy (endowments (0,9) and (10,0); u₁=u₂=min {x,y}), the allocation that gives (10,9) to agent 1 and (0,0) to agent 2 is (A) Pareto efficient but not a competitive equilibrium allocation (B) neither Pareto efficient nor a competitive equilibrium allocation (C) a competitive equilibrium allocation that is Pareto efficient (D) a competitive equilibrium allocation that is not Pareto efficient

Also written as: For the same economy (endowments (0,9) and (10,0); u_1=u_2=min {x,y}), the allocation that gives (10,9) to agent 1 and (0,0) to agent 2 is

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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Question from the DSE 2020 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.