A Competitive Equilibrium Is Pareto Efficient Because at the Competitive

question 83

Multiple Choice

A competitive equilibrium is Pareto efficient because at the competitive equilibrium,

• A) prices have been allowed to adjust.
• B) there are no further gains from trade.
• C) the final outcome is different from the original inefficient endowment.
• D) all members of society can be made better off.

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Definitions:

Taxable Income

The amount of an individual's or a corporation's income used to determine how much tax is owed to the government.

Married Filing Jointly

A tax filing status for married couples who choose to combine their income and deductions on a single tax return.

Tax

The amount of money a person must pay to the government to benefit from government services.

Marriage Penalty

A situation in the tax code where married couples end up paying more combined tax than they would as two single individuals.