Consider three ways of allocating two goods in a two-person exchange economy.
I.Both individuals take prices as given and equilibrium prices are established by an impartial auctioneer.
II.One individual can act as a perfect price discriminator and force the other individual to pay a different price for each unit of a good that is traded.
III.One individual is a monopolist and can charge the other individual a single,utility-maximizing price.
Which of these situations is efficient?
A)None of them.
B)Only I.
C)I and II,but not III.
D)I and III,but not II.
E)All of them.

Question

Consider three ways of allocating two goods in a two-person exchange economy. 
I.Both individuals take prices as given and equilibrium prices are established by an impartial auctioneer.
II.One individual can act as a perfect price discriminator and force the other individual to pay a different price for each unit of a good that is traded.
III.One individual is a monopolist and can charge the other individual a single,utility-maximizing price.
Which of these situations is efficient?
A)None of them.
B)Only I.
C)I and II,but not III.
D)I and III,but not II.
E)All of them.

Quizplus · Accepted Answer

The Answer of Consider three ways of allocating two goods in a two-person exchange economy. 
I.Both individuals take prices as given and equilibrium prices are established by an impartial auctioneer.
II.One individual can act as a perfect price discriminator and force the other individual to pay a different price for each unit of a good that is traded.
III.One individual is a monopolist and can charge the other individual a single,utility-maximizing price.
Which of these situations is efficient?
A)None of them.
B)Only I.
C)I and II,but not III.
D)I and III,but not II.
E)All of them.

Consider Three Ways of Allocating Two Goods in a Two-Person