If the initial distribution of two goods between two people is ...

[jenna1]

If the initial distribution of two goods between two people is Pareto optimal, which of the following statements is TRUE?
 
  A) It is possible to reallocate the goods between the two people so as to increase the utility of both people.
  B) It is possible to reallocate the goods between the two people so as to increase the utility of one person without decreasing the utility of the other.
  C) It is possible to reallocate the goods between the two people so as to increase the utility of one person, but only at the expense of the other person.
  D) It is impossible to reallocate the goods between the two people so as to increase either person's utility.
  E) none of the above

Question 2

Refer to Scenario 12.3. What will be the price of this new drink in the long run if the industry is a Stackelberg duopoly?
 
  A) 3
  B) 9
  C) 12
  D) 13.50
  E) none of the above

[dreamfighter72]

Answer to Question 1

C

Answer to Question 2

E