{"id":49097,"date":"2024-04-15T22:50:51","date_gmt":"2024-04-15T22:50:51","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=49097"},"modified":"2024-04-15T22:50:51","modified_gmt":"2024-04-15T22:50:51","slug":"according-to-the-kaldor-hicks-compensation-criterion-a-change-in-economic-policy-leads-to-an-improvement-in-social-welfare-if","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-kaldor-hicks-compensation-criterion-a-change-in-economic-policy-leads-to-an-improvement-in-social-welfare-if\/","title":{"rendered":"According to the Kaldor-Hicks compensation criterion, a change in economic policy leads to an improvement in social welfare, if"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;the gainers can just compensate the losers&#8221; option2=&#8221;the losers can profitably bribe the gainers to induce them to stay in the old position&#8221; option3=&#8221;the gainers can compensate the losers for their loss and still remain better-off themselves than before&#8221; option4=&#8221;The losers do not oppose the change&#8221; correct=&#8221;option3&#8243;]<!--more--><\/p>\n<p>The correct answer is: C. the gainers can compensate the losers for their loss and still remain better-off themselves than before.<\/p>\n<p>The Kaldor-Hicks compensation criterion is a potential Pareto improvement criterion. It states that a change in economic policy is considered to be an improvement if the gainers from the change could compensate the losers and still be better off than before, even if the losers do not actually receive compensation.<\/p>\n<p>Option A is incorrect because it does not require that the gainers be better off after compensating the losers. Option B is incorrect because it does not require that the gainers be able to compensate the losers. Option D is incorrect because it does not require that the gainers be better off after the change.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;the gainers can just compensate the losers&#8221; option2=&#8221;the losers can profitably bribe the gainers to induce them to stay in the old position&#8221; option3=&#8221;the gainers can compensate the losers for their loss and still remain better-off themselves than before&#8221; option4=&#8221;The losers do not oppose the change&#8221; correct=&#8221;option3&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-49097","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>According to the Kaldor-Hicks compensation criterion, a change in economic policy leads to an improvement in social welfare, if<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-kaldor-hicks-compensation-criterion-a-change-in-economic-policy-leads-to-an-improvement-in-social-welfare-if\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"According to the Kaldor-Hicks compensation criterion, a change in economic policy leads to an improvement in social welfare, if\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;the gainers can just compensate the losers&#8221; 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