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.

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Definitions:

Developmental Science

An interdisciplinary field of research aimed at understanding the nature of human growth and development across the lifespan.

Developmental Science

An interdisciplinary field studying the changes that occur in individuals (especially human beings) over the course of their lifespan.

Interdisciplinary

Involving two or more academic, scientific, or artistic areas of knowledge or disciplines.

Cultural Processes

The means by which the social, economic, and environmental conditions are influenced and shaped by the beliefs, practices, and values of a society.