Suppose we have an allocation where S1,S2,S3,S4,S5 produce a widget and D1,D2,D3,D4,D5
consume a widget.
a) This is not Pareto efficient because we can have S9 sell to D1 for $9, S8 sell to D2 for $8, S7
sell to D3 for $7, and so on up to S1 sell to D9 for $1, and this will maximize output.
b) This is not Pareto efficient because S8 can sell a widget to D8 for $8 and both are better off.
c) This is not Pareto efficient because S5 should outsource production to S10.
d) This is not Pareto efficient because the condition for efficient allocation of consumption is not
satisfied.
e) None of the above.