Question: 16. What does the first welfare theorem state? a) A perfectly competitive market outcome is Pareto efficient. b) Equity and efficiency issues can be

16. What does the first welfare theorem state? a) A perfectly competitive

16. What does the first welfare theorem state? a) A perfectly competitive market outcome is Pareto efficient. b) Equity and efficiency issues can be isolated in a general equilibrium setting. c) Market mechanism finctions only in a partial equilibrium setting. d) A Pareto efficient outcome can never be attained in an Edgeworth box. 17. What does the second welfare theorem state? a) Perfectly competitive market outcome is always Pareto efficient. b) Equity and efficiency issues can be isolated in a general equilibrium setting. c) Market mechanism functions only in a partial equilibrium setting. d) A Pareto efficient outcome can nerer be attained in an Edgeworth box.

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