7. (a) What is the First theorem of Welfare Economic. (b) In what sense does it relate to Adam Smith's notion of "an invisible hand." (c) Does the theorem hold if there are some pecuniary externalities? (d) Does the theorem hold if there are some real externalities? (e) What is the distinction between pecuniary and real externalities?

7. (a) What is the First theorem of Welfare Economic. (b) In what sense does it relate to Adam Smith's notion of "an invisible hand." (c) Does the theorem hold if there are some pecuniary externalities? (d) Does the theorem hold if there are some real externalities? (e) What is the distinction between pecuniary and real externalities?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 2PA

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