If a situation is Pareto efficient, are Pareto improvements possible? If a situa

Question

If a situation is Pareto efficient, are Pareto improvements possible? If a situation is Pareto efficient, then Pareto improvements

A. are possible because everyone shares the extra surplus from the improvement.

B. are not necessarily possible because the improvement could leave someone no better or worse off.

C. are not necessarily possible because no one may be better off.

D. are not possible because any change would make at least one person worse off.

E. are possible because at least one person would be better off without anyone being worse off.

Explanation / Answer

If a situation is Pareto efficient, are Pareto improvements possible? If a situation is Pareto efficient, then Pareto improvements

D. are not possible because any change would make at least one person worse off.

This is beacuse an increase in the welfare of one person (in the case of pareto effficiency) can only come by worsening off the welfare of the other person.

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