Pareto Optimality Is the Condition in Which

question 65

Multiple Choice

Pareto optimality is the condition in which

• A) the distribution of income is equal.
• B) no change is possible that will make some members of society better off without making at least one other member of society worse off.
• C) firms are forced to internalize the effects of all externalities.
• D) it is possible to make one person better off without making someone else worse off.

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Definitions:

Solvency

The ability of a company to meet its long-term financial commitments and continue its operations.

Profitability

The ability of a company to generate earnings as compared to its expenses and other relevant costs incurred during a specific period.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to fund its operations and growth.

Liquidity

The facility to convert an asset into cash seamlessly without impacting its market rate.