Which of the following would not satisfy the potential compensation criterion?
A)The winners from a policy change could compensate the losers so everyone would be better off.
B)The policy change was approved by a unanimous vote.
C)The policy change was a Pareto superior move
D)The policy change moved from a Pareto optimal position to a non-Pareto optimal position.

Question

Quizplus · Accepted Answer

The potential compensation criterion suggests that a policy change is desirable if those who benefit could theoretically compensate those who are worse off, making everyone better off or at least not worse off. A move from a Pareto optimal position (where no one can be made better off without making someone else worse off) to a non-Pareto optimal position does not satisfy this criterion, as it implies someone is made worse off without the possibility of compensation.

Which of the Following Would Not Satisfy the Potential Compensation