1)(a)"As long as preferences are Convex, every Pareto efficient allocation can be supported as competitive equilibrium" Explain using edge worth box.

b) "Is there a ideal way aggregating individual preferences into Social preferences". Explain using Arrow impossibility theorem. Also give the various voting options with examples.

2)How do inefficiencies occur in the market due to externalities.? Explain. Also in what Circumstance Adverse Selection and Moral hazard different. Can one exist without the other.