Question

Which of the following statements is true about Pareto Efficiency?

• A. It considers both efficiency and equity in resource allocation.
• B. It only focuses on making sure everyone is treated equally.
• C. It aims to improve resource allocation without reducing anyone’s utility.
• D. It requires that everyone has equal access to resources.

Answer 1

Answer:

C. It aims to improve resource allocation without reducing anyone’s utility.

Pareto Efficiency is about achieving a state where reallocating resources to improve one person’s well-being would negatively impact another person’s utility, prioritizing efficiency over equality.