In a Pure Exchange Economy, If an Allocation Is Pareto

question 21

True/False

In a pure exchange economy, if an allocation is Pareto efficient, it is impossible to have two people who prefer each other's consumption bundles to their own.

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Definitions:

Proximity

The physical or psychological closeness between people, which can influence relationships and social interactions.

Figure-Ground Relationship

A visual perception principle stating that people instinctively perceive objects (the figure) as distinct from their surroundings (the ground).

Binocular Disparity

The difference in the images seen by the left and right eye, which contributes to the perception of depth.

Good Continuation

A principle in Gestalt psychology that states people tend to perceive connected lines or patterns as continuing in a smooth, uninterrupted manner.