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Analytical Reasoning: True/False/Uncertain Question 1 A risk-averse individual always accepts a fair bet. Question 2 In the presence of externality, Pareto efficiency condition is not attainable. Question 3 Given relative good prices in a world of two commodities and two factors that ensure constant wage-rental ratio, an increase in the supply of labor increases the production of the labor-intensive commodity and decreases the production of the capital-intensive commodity. Question 4 A competitive equilibrium allocation is not necessarily Pareto efficient