If an Allocation Is Pareto Optimal and If Indifference Curves

question 6

Multiple Choice

If an allocation is Pareto optimal and if indifference curves between the two goods have no kinks, then

• A)two consumers who consume both goods must have the same MRS between them, but consumers may consume the goods in different ratios.
• B)two consumers with the same income who consume both goods must have the same MRS, but if their incomes differ, their MRSs may differ.
• C)any two consumers who consume both goods must consume them in the same ratio.
• D)for any two consumers who consume both goods, neither will prefer the other consumer's bundle to his own.
• E)all consumers receive the bundle that they prefer to any other bundle the economy could produce for them.

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Definitions:

Place Theory

A theory in hearing that proposes the perception of sound pitch is determined by the location of maximum vibration on the basilar membrane of the inner ear.

Pitch Perception

The ability of an individual to recognize and differentiate sounds based on their frequency, enabling us to identify musical notes, tones, and the inflection in speech.

Basilar Membrane

A structure in the cochlea of the inner ear that plays a key role in the sense of hearing by vibrating in response to sound.

Cornea

The transparent front part of the eye that covers the iris, pupil, and anterior chamber, responsible for most of the eye's focusing power.