Once a Point on a Contract Curve Has Been Chosen

question 20

Multiple Choice

Once a point on a contract curve has been chosen,

• A) it is possible to make both individuals better off.
• B) it is possible to make one individual better off only at the expense of the other.
• C) there is no change that would make both individuals worse off.
• D) it is impossible for both individuals to have more of both goods.

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Definitions:

Income Taxes

Taxes levied by a government on individuals or entities based on their income or profits within a given tax period.

Payroll Taxes

Taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.

Demand And Supply Diagram

A graphical representation used to show the relationship between the demand for a product and its supply, illustrating equilibrium price and quantity.

Efficiency Loss

Refers to the decrease in economic efficiency that can occur when equilibrium for a good or a service is not achieved, often due to market failure or intervention.