The Second Fundamental Theorem of Welfare Economics Requires

question 3

Multiple Choice

The Second Fundamental Theorem of Welfare Economics requires

• A) that indifference curves be convex to the origin.
• B) that isoquants be concave to the origin.
• C) that there are no set prices for Pareto efficient allocations.
• D) that production be twice as large as consumption.
• E) all of these answer options are correct.

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Definitions:

Whisky Consumption

It refers to the amount of whisky that is consumed over a given period of time, indicating the demand for this specific alcoholic beverage.

Rawlsian Social Welfare Function

A concept based on John Rawls' theory of justice, prioritizing the well-being of the least advantaged members of society in the allocation of resources.

Utility

In economics, utility is a measure of the satisfaction or happiness that a consumer derives from consuming goods and services.

Mayor

An elected official who acts as the head of a city, town, or municipality, responsible for implementing and overseeing local government policies and functions.