Answer to Question #66120 in Microeconomics for Suman das

Question

Pareto approach for analyzing the welfare economics

Answer 1

According to the Pareto principle, the maximum prosperity can only be achieved with such allocation of resources in the state when the next redistribution of resources does not happen, and then the utility level is not increased in society. Improving the situation in the country can only happen when the welfare of some people is growing, but the well-being of others will not change, according to the Pareto distribution. Pareto believed that fiscal policy in the sphere of social protection of public finances is key to prosperity.