"Any Social Planner Who Implements Efficient Outcomes Will Produce the Same

question 6

Multiple Choice

"Any social planner who implements efficient outcomes will produce the same output in a given market as the competitive market would." In addition to the conditions of the first welfare theorem, which of the following have to hold in order for the statement in quotes to be true?

• A)Consumer tastes are quasilinear.
• B)Consumer tastes are homothetic.
• C)Production frontiers are homothetic.
• D)Both (a) and (c).
• E)Both (b) and (c).
• F)None of the above.

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Definitions:

Patent

A legal document granted by the government that gives an inventor exclusive rights to make, use, or sell an invention for a certain number of years.

Exclusive Right

A legal privilege granted to an individual or organization to be the sole provider or practitioner of a specific service or product in a particular area.

Forever

A term indicating an infinite or unspecified period of time, often used in the context of time without end.

Average Total Cost

The cost per unit of output, calculated by dividing the total cost by the quantity of output produced.