According to the first theorem of welfare economics:
A)every competitive equilibrium is fair.
B)if the economy is in a competitive equilibrium, there is no way to make anyone better off.
C)a competitive equilibrium always exists.
D)at a Pareto optimum, all consumers must be equally wealthy.
E)None of the above.

Question

Quizplus · Accepted Answer

The first theorem of welfare economics states that any competitive equilibrium leads to a Pareto efficient allocation of resources, not necessarily that it is fair or that no one can be made better off without making someone else worse off.

According to the First Theorem of Welfare Economics