Suppose Simon Petrikov decides to stop trying to capture princesses. This new policy will put Jake and Finn – who rescue princesses for a living – out of business, costing them a combined $100. However, Lumpy Space Princess and Princess Bubblegum each gain $75 from this new turn of events, as they save money in precautions. Simon’s new policy is: A. Pareto optimal B. Welfare-reducing C. Potentially Pareto improving/Kaldor-Hicks efficient D. Only Potentially Pareto improving/Kaldor-Hicks efficient if LSP and Bubblegum give Jake and Finn at least $100

Suppose Simon Petrikov decides to stop trying to capture princesses. This new policy will put Jake and Finn – who rescue princesses for a living – out of business, costing them a combined $100. However, Lumpy Space Princess and Princess Bubblegum each gain $75 from this new turn of events, as they save money in precautions. Simon’s new policy is: A. Pareto optimal B. Welfare-reducing C. Potentially Pareto improving/Kaldor-Hicks efficient D. Only Potentially Pareto improving/Kaldor-Hicks efficient if LSP and Bubblegum give Jake and Finn at least $100

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 13QP

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	A.	Pareto optimal
	B.	Welfare-reducing
	C.	Potentially Pareto improving/Kaldor-Hicks efficient
	D.	Only Potentially Pareto improving/Kaldor-Hicks efficient if LSP and Bubblegum give Jake and Finn at least $100