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EXAMPLE:

A three-person society is facing a problem
There are three policy solutions: A, B, C available
Which are Pareto efficient?

a. Policy solutions A
b. Polocy solutions B
c. Polocy solutions C

User Pokche
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1 Answer

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Final answer:

Allocative efficiency is determined by the preferences of society, while productive efficiency can be determined by choices on the production possibilities frontier (PPF). To determine which policy solutions are Pareto efficient, more information about the specific choices is needed.

Step-by-step explanation:

Allocative efficiency is determined by the preferences of society as expressed through government and other social institutions. Since we do not have information about these preferences, we cannot determine which of the policy solutions A, B, or C would be allocatively efficient.

However, productive efficiency can be determined by looking at the choices on the production possibilities frontier (PPF). If a choice lies on the PPF, it represents productive efficiency. Therefore, to determine which policy solutions are Pareto efficient, we need to consider the choices that lie on the PPF.

Without knowing the specific choices of policy solutions A, B, and C, we cannot determine which ones are Pareto efficient. To determine the Pareto efficient solutions, you will need more information about the specific choices and their outcomes.

User IZBasit
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