The First Fundamental Theorem of Welfare Economics Indicates That

question 12

Multiple Choice

The first fundamental theorem of welfare economics indicates that

• A) every Pareto-optimal allocation for an economy can be achieved as a competitive equilibrium for an appropriately defined distribution of income
• B) an economy should be organized so as to maximize the welfare of the least well-off person in society
• C) when a competitive equilibrium exists, the allocations of inputs and outputs in the economy define a Pareto-optimal outcome

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