If the Initial Allocation of Goods Is Not Efficient, Consumers

question 43

Multiple Choice

If the initial allocation of goods is not efficient, consumers will:

• A) not be able to trade goods and achieve Pareto efficiency.
• B) buy and sell goods at market prices until the marginal rate of substitution is equalized across all consumers.
• C) be required to consume somewhere along their contract curve.

---

Definitions:

Triglyceride

A molecule made of three fatty acids esterified to glycerol, serving as the primary form of fat storage in animals and plants.

Complex Lipid

Any of a group of lipids that combine with other types of molecules, such as carbohydrates or proteins, forming structures essential for living organisms.

Simple Lipids

Lipids that consist of fatty acids esterified with glycerol, including fats and oils, which serve as energy storage molecules in living organisms.

Esterification

A chemical reaction that forms an ester through the reaction of a carboxylic acid and an alcohol.