Indicate whether each of the following statements is true, false, or uncertain, and justify your answer. a.

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Indicate whether each of the following statements is true, false, or uncertain, and justify your answer.

a. If everyone has the same marginal rate of substitution, then the allocation of resources is Pareto efficient.

b. If the allocation of resources is Pareto efficient, then everyone has the same marginal rate of substitution.

c. A policy change increases social welfare if, and only if, it represents a Pareto improvement.

d. A reallocation from a point within the utility possibilities curve to a point on the utility possibilities curve results in a Pareto improvement.

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Public Finance

ISBN: 9780073511351

9th Edition

Authors: Harvey Rosen, Robert Guell, Ted Gayer

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