Figure 8B

-Refer to Figure 8B. Suppose point N on the production possibility frontier represents the status quo. Recently, a relaxation of environmental standards allows a country to move to point K. Which of the following best described the results from this move?
A) No one is made worse off.
B) Everyone is made worse off.
C) Pareto improvement occurs.
D) This situation can never occur in reality.
E) None of the above.

Question

Figure 8B
 
-Refer to Figure 8B. Suppose point N on the production possibility frontier represents the status quo. Recently, a relaxation of environmental standards allows a country to move to point K. Which of the following best described the results from this move?
A) No one is made worse off. 
B) Everyone is made worse off. 
C) Pareto improvement occurs. 
D) This situation can never occur in reality. 
E) None of the above.

Quizplus · Accepted Answer

The relaxation of environmental standards may lead to increased production at the expense of environmental quality, potentially making some individuals worse off due to environmental degradation. Thus, it is not a Pareto improvement, and not everyone is made worse off, making none of the options fully correct.

Figure 8B -Refer to Figure 8B. Suppose Point N on the Production