Question 3 (1 point)
In order for an allocation to be pareto efficient, the Marginal Rate of Substitution
between goods such as Pizza and Beer needs to be equal to the Marginal Rate of
Technical Substitution of Inputs such as Kapital and Labour.
True
False
Question 4 (1 point)
In an exchange economy, an allocation is not Pareto efficient unless the Marginal
Rate of Substitution across individuals is equal (assuming all individuals consume
obtain positive amounts of all goods).
True
False
Question 3 (1 point)
In order for an allocation to be pareto efficient, the Marginal Rate of Substitution
between goods such as Pizza and Beer needs to be equal to the Marginal Rate of
Technical Substitution of Inputs such as Kapital and Labour.
True
False
Question 4 (1 point)
In an exchange economy, an allocation is not Pareto efficient unless the Marginal
Rate of Substitution across individuals is equal (assuming all individuals consume
obtain positive amounts of all goods).
True
False