Which of the following conditions must be met before the combination of goods produced in society can be considered efficient?
A)Pareto- improving moves are impossible.
B)The output of at least one good must be maximized.
C)The bundle of goods is within the production possibilities frontier.
D)All consumers are equally well off.

Question

Quizplus · Accepted Answer

Pareto efficiency, or Pareto optimality, is a state of allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off. This concept is crucial in economics, especially in the context of efficiency and welfare economics. When no further Pareto improvements can be made, the allocation is considered efficient, meaning that the resources are utilized in such a way that you cannot improve someone's situation without worsening someone else's. This does not necessarily mean that everyone is equally well off, nor does it require the maximization of output for any particular good or that the production must be on a specific point of the production possibilities frontier. Instead, it focuses on the impossibility of reallocation that could improve someone's situation without harming others.

Which of the Following Conditions Must Be Met Before the Combination