The first fundamental theorem of welfare economics states that
A) under certain conditions, a competitive equilibrium is Pareto-optimal.
B) a competitive equilibrium is always Pareto-optimal.
C) under certain conditions, a Pareto optimum is a competitive equilibrium.
D) a Pareto optimum is always a competitive equilibrium.
E) a Pareto optimum does not have to be a competitive equilibrium.
Correct Answer:
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Q28: Much of the writings of Adam Smith
Q29: A competitive equilibrium has the following property:
A)
Q30: An externality is any activity for which
Q31: The presence of a distorting tax on
Q32: A Pareto optimum requires
A) MPn = slope
Q34: The marginal rate of transformation is equal
Q35: An increase in government spending shifts the
Q36: A Pareto optimum
A) can be found in
Q37: Relative to the social optimum, monopoly power
Q38: The marginal rate of transformation is
A) the
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