Why Does Perfect Competition Guarantee a Pareto Optimal Distribution of Goods

question 88

Multiple Choice

Why does perfect competition guarantee a Pareto optimal distribution of goods between two people? Under perfect competition,

• A) everyone has the same preferences.
• B) everyone faces the same prices.
• C) everyone consumes the same quantity of both goods.
• D) goods are homogeneous.

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Definitions:

Glycogen

The principal storage polysaccharide in animal cells; formed from glucose and stored primarily in the liver and, to a lesser extent, in muscle cells

Cellulose

A structural polysaccharide consisting of beta glucose subunits; the main constituent of plant primary cell walls.

Starch

A polysaccharide composed of alpha glucose subunits; made by plants for energy storage.

Glycogen

A multi-branched polysaccharide of glucose that serves as a form of energy storage in humans, animals, fungi, and bacteria.