Use the following statements to answer this question: I. The first theorem of welfare economics refers to efficient allocation of goods across groups of consumers, and it does not consider the problem of efficient production of these goods.
II) The only way to achieve an efficient allocation of goods is to use competitive markets.
A) I and II are true.
B) I is true and II is false.
C) II is true and I is false.
D) I and II are false.

Question

Quizplus · Accepted Answer

Statement I is true, as it refers to the first theorem of welfare economics, which states that any competitive equilibrium leads to an efficient allocation of resources. However, statement II is false, as there are other ways to achieve an efficient allocation of goods, such as through central planning or regulation.

Use the Following Statements to Answer This Question: I