usefulness of the Edgeworth Box and Contract Curve in explaining Pareto Optimality?

Q: Come up with an example with four agents and four items in which there is only one Pareto efficient…

A: Pareto efficiency is a term used in game theory and economics to describe resource allocation in…

Q: Explain equilibrium. Be specific and provide at least one example.

A: In a market, a household enters and makes a demand for commodities at a different price level.…

Q: How equilibrium is determined in microeconomics?

A: Equilibrium is defined as a state in the economy where all economic forces are balancing each other.

Q: What is relationships between general competitive equilibrium, pareto efficiency and equity in an…

A: Pareto efficiency, or pareto optimality, is an economic state wherever resources can't be…

Q: What do you understand by the following terms:                  - Bounded rationality…

A: Bounded Rationality - Individuals are considered to be rational when making decisions, however,…

Q: Why is economics often described as the science of constrained choice?

A: The desire and need for goods and services such as food, housing, cloth, and anything that improve…

Q: Explain the role of marginal analysis in economics.

A: In economics, the term marginal is used to describe an additional outcome that is added to the…

Q: Define what we mean by Pareto optimality and given an example of a Pareto optimal allocation

A: Pareto optimality:- The situation of Pareto optimality occurs when resources in an economy are…

Q: f absolute advantage and comparitive advantag

A: When two countries involve in trade, one country exports that good in which it has ‘comparative…

Q: State the equilibrium conditions for Pareto efficiency equation

A: In a market, a Pareto efficiency level is considered as the one at which market is producing the…

Q: Why is the law of demand and the law of supply a useful economic model

A: The law of both demand and supply shows the interaction between buyers and sellers of the good or…

Q: The First Theorem of Welfare Economics (that a competitive equilibrium is Pareto efficient) may not…

A: The first theorem of welfare economics is otherwise known as the fundamental theorem and also known…

Q: Using an Edgeworth box, illustrate and explain the concept of Pareto efficiency

A: The above figure represents the Edgeworth box where O1 is the origin of the individual-1 and O2 is…

Q: Why social optimal output more beneficial to society?

A: A socially optimal output is produced at a point when the marginal social cost is equal to marginal…

Q: The problem of choice is called the Economic problem True/False

A: The biggest problem the economy has to deal with is the problem of scarcity which means that the…

Q: Can you explain the Pareto principle

A: There are many economic models that helps in understanding the factors and their behavior in the…

Q: Analyze how pareto efficiency is achieved from consumption activities in an economy

A: Human wants are unlimited but the resources to satisfy these wants are limited. Hence there is a…

Q: What is difference between Pareto Efficiency and Pareto Optimality?

A: Pareto Efficiency is making best use of available limited resources as per the tastes and budget of…

Q: Is it possible to have a Pareto efficient allocation where everyone is worse off than they are at an…

A: Pareto efficiency occurs where it is impossible to make anyone better off without making someone…

Q: competitive equilibrium

A: A competitive equilibrium refers to a country wherein the financial system has reached stability…

Q: The most important assumption in economics is-  complexity selfishness rationality human error

A: Economics is defined as the production of goods and services that are distributed in an economy. It…

Q: a) Explain exchange efficiency and production efficiency and give the main condition for each type…

A: Exchange efficiency appears with a given combination of goods, it is not possible to redistribute…

Q: Example of marginal analysis with explanation.

A: In financial matters, marginal investigation implies we take a gander at the last unit of…

Q: Why is "choice" an important concept in Microeconomics?

A: Meaning of Microeconomics: The term microeconomics refers to that situation under which the…

Q: What does the Pareto efficiency criterion state? A. An allocation of resources is efficient if it…

A: The Pareto Efficiency Criterion is a concept in welfare economics that assesses the efficiency of…

Q: Why is the equality between the marginal benefit and marginal cost of an action an equilibrium…

A: Marginal benefit can be defined as the additional gain after consuming an additional amount of given…

Q: Describe the Edgeworth box.

A: Edgeworth box is a two-dimensional representation of a simple, closed economy which has two…

Productive and Allocative Efficiency Analysis

Productive efficiency, also referred to as production efficiency is a term in economics describing the level at which a company is operating at its maximum capacity. Beyond this point, the entity will be unable to manufacture any additional goods without cutting down another product’s production level. This occurrence is an outcome of production happening alongside a Production Possibility Frontier (PPF).