Economics 9708 · AS & A Level · Behavioural economics

Behavioural economics — practice question

Joshua and Ruth are the sole inhabitants of a remote island. In the diagram, line XY represents the greatest quantity of goods available to Joshua and Ruth, while line OE shows points of equal distribution of the goods. Relative to the original point I, which point would show a rise in economic welfare under the Pareto Efficiency Criterion?

  • Apoint A
  • Bpoint B
  • Cpoint C
  • Dpoint D

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