When the marginal rates of substitution [MRSs] for a given distribution of goods differ for two parties,which of the following is incorrect?
A)Mutually beneficial trade is possible.
B)Indifference curves are intersecting.
C)The efficient outcome is unique.
D)Trade can make at least one party better off.

Question

Quizplus · Accepted Answer

When MRSs differ, it indicates that the current allocation is not Pareto efficient, meaning there are multiple efficient outcomes possible, not a unique one.

When the Marginal Rates of Substitution [MRSs] for a Given