The Second Welfare Theorem of Economics States That If Preferences

question 43

True/False

The second welfare theorem of economics states that if preferences are convex, then any Pareto optimal allocation could be achieved as a competitive equilibrium after some reallocation of initial endowments.

---

Definitions:

Policies

Guidelines or principles adopted by an organization, government, or individual to guide decision-making and achieve desired outcomes.

Positive Economics

The branch of economic analysis that describes the way the economy actually works.

Production Possibility Frontier

A visual map outlying the highest possible production levels for two goods, considering a defined compilation of resources and other relevant factors.

Minimum Quantity

The smallest amount of a product that can be ordered or purchased at one time.