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Economics is the study of how society chooses to allocate its scarce resources. In a mixed economy, elements of both central planning and market resource allocation are used in allocating productive resources. The United States economy is a mixed economy, with a bias towards market allocation of resources. This means most resources are allocated in the private sector by means of markets. Discuss whether you favor a larger or smaller role of government in the economy. Refer to concepts found in the reading to support your opinion.
1. What is meant by the Pareto Efficiency of an allocation of resources?
2. How unique is it for an allocation of resources to be Pareto efficient?
3.What consideration is overlooked by Pareto efficiency?
3. What does the First Theorem of Welfare Economics assert?