Pareto Efficiency and First Welfare Theorem
(a) Write down the three general principles for an efficient allocation.
(b) Write down the First Welfare Theorem.
(c) (True/False) Is the following statement true or false? Explain.
Suppose an allocation is Pareto efficient. This implies that consumer surplus is equally divided among all the D people who consume, and producer surplus is equally divided among all the S people who produce.