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If the Initial Distribution of Labor and Capital Is Pareto

Question 33

Multiple Choice

If the initial distribution of labor and capital is Pareto optimal, which of the following statements is TRUE?


A) It is possible to reallocate labor and capital across industries so as to increase the production of one good without decreasing the production of another good.
B) It is possible to reallocate labor and capital across industries so as to increase the production of one good, but only by reducing the production of another good.
C) It is possible to reallocate labor and capital across industries so as to increase the production of every good.
D) none of the above

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