Answer TRUE or FALSE, along with an explanation.

• The levels of poverty and inequality observed in the real world contradict the Welfare Theorems for competitive markets.
• Markets are the only exchange mechanisms that yield Pareto-efficient allocations of goods.
• Taxes make markets less efficient.
• Consider a production economy in which firmais twice as productive as firmb, that is, firmbhas production functionf(z) and firmahas production function 2f(z). Then firmbmust shut down in all competitive equilibria.
• Private health insurance is expensive because markets should not be used to deliver health care.