If the initial allocation of goods is not efficient, consumers will: be required to consume somewhere along their contract curve. buy and sell goods at market prices until the marginal rate of substitution is equalized across all consumers. change their tastes and preferences via their utility function to match the market's marginal rate of substitution. not be able to trade goods and achieve Pareto efficiency.

If the initial allocation of goods is not efficient, consumers will: be required to consume somewhere along their contract curve. buy and sell goods at market prices until the marginal rate of substitution is equalized across all consumers. change their tastes and preferences via their utility function to match the market's marginal rate of substitution. not be able to trade goods and achieve Pareto efficiency.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 21SQ

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