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If an Allocation Is Pareto Optimal and If Indifference Curves

Question 27

Multiple Choice

If an allocation is Pareto optimal and if indifference curves between the two goods have no kinks, then


A) two consumers who consume both goods must have the same MRS between them, but consumers may consume the goods in different ratios.
B) two consumers with the same income who consume both goods must have the same MRS, but if their incomes differ, their MRSs may differ.
C) any two consumers who consume both goods must consume them in the same ratio.
D) for any two consumers who consume both goods, neither will prefer the other consumer's bundle to his own.
E) all consumers receive the bundle that they prefer to any other bundle the economy could produce for them.

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