Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A situation where one person can be made better off without making anyone else worse off.
B
A case where resources are distributed equally among all individuals, regardless of need.
C
A market where goods are overproduced, leading to wastage.
D
A community where resources are allocated based on majority preference.
Understanding the Answer
Let's break down why this is correct
Answer
Pareto efficiency happens when resources are allocated in a way that no one can be made better off without making someone else worse off. For example, imagine a class of students sharing a pizza. If one student takes a larger slice, they might enjoy it more, but this means there are smaller slices left for others, making them less happy. In a Pareto efficient situation, everyone gets a slice that they are satisfied with, and if one student takes more, it will negatively affect others. So, the scenario that shows Pareto efficiency is one where every student feels satisfied with their share of the pizza, and no one can take more without making someone else unhappy.
Detailed Explanation
This option shows that one person can improve their situation without hurting anyone else. Other options are incorrect because This option suggests everyone gets the same amount, but that doesn't consider what people actually need; Overproducing leads to waste, which is not efficient.
Key Concepts
Pareto efficiency
Topic
Resource Allocation and Scarcity
Difficulty
easy level question
Cognitive Level
understand
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