Asked by Rebekah Gonzalez on Jul 23, 2024
Verified
A government policy generates $10,000 of benefits to underprivileged youth at a cost of $5,000 to taxpayers. The policy is Pareto efficient.
Pareto Efficient
A circumstance in resource distribution where any improvement for one individual means a disadvantage for at least another.
Underprivileged Youth
Young individuals who lack the social, economic, and educational advantages of their peers.
Taxpayers
Individuals or entities that are obliged to pay taxes to a governmental authority.
- Master the understanding of Pareto efficiency and its implementation in scrutinizing government policies and market dealings.
Verified Answer
MA
Maria AnagnostopoulosJul 29, 2024
Final Answer :
False
Explanation :
The policy is not Pareto efficient because it makes taxpayers worse off, even if underprivileged youth benefit. Pareto efficiency requires that no one can be made better off without making someone else worse off, and in this case, taxpayers are made worse off.
Learning Objectives
- Master the understanding of Pareto efficiency and its implementation in scrutinizing government policies and market dealings.