Question 2

Peter, John, and James are discussing how to share three apples and three oranges. For each of the following statements, state whether the statement is TRUE or FALSE and provide a short explanation for your choice.

1. (2 points) Assuming that Peter likes both apples and oranges, there is no possible Pareto improvement to an allocation in which he has all the apples and oranges.
2. (2 points) It is always Pareto efficient for Peter, John, and James to have one apple and one orange each.