Asked by Abdul Rahman Aljajah on Jun 18, 2024
Verified
If a market is in equilibrium, then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good.
Economic Welfare
The overall well-being and standard of living of people in an economy, often measured in terms of income, health, and education.
Social Planner
A theoretical decision-maker who aims to achieve the best possible outcomes for a society, considering all available information and societal preferences.
- Appreciate the role of equilibrium in maximizing total market benefits.
Verified Answer
SG
Sanjita GautamJun 18, 2024
Final Answer :
True
Explanation :
In a market equilibrium, resources are allocated efficiently, meaning that it is not possible to increase economic welfare by altering the quantity of the good without causing a loss elsewhere, according to the Pareto efficiency principle.
Learning Objectives
- Appreciate the role of equilibrium in maximizing total market benefits.