Which of the following is a Pareto-optimal condition for an economy with public goods and many private goods?

Question

Quizplus · Accepted Answer

The Pareto-optimal condition for an economy with public goods and many private goods is that the marginal rate of substitution between any two goods equals their price ratio. This is because the marginal rate of substitution measures the rate at which consumers are willing to trade one good for another, while the price ratio measures the rate at which goods can be traded in the market. If the marginal rate of substitution is equal to the price ratio, then consumers are getting the most satisfaction from their consumption of goods, and the economy is Pareto-optimal.

Which of the Following Is a Pareto-Optimal Condition for an Economy