Either Worker a or Worker B Will Produce $20,000 of Output

Either Worker A or Worker B will produce $20,000 of output for Employer X (who only needs one worker) . Worker A could produce $12,000 worth of goods elsewhere (this is Worker A's best alternative) ; Worker B could produce $15,000 worth of goods elsewhere (this is Worker B's best alternative) . Which of the following (if they occur) is not Pareto Efficient in the sense that gainers cannot compensate losers for their losses?

A) Employer X hires Worker B for $18,000.
B) Employer X hires Worker A for $18,000.
C) Employer X hires Worker A for $14,000.
D) Employer X hires Worker A for $5,000.

Correct Answer:

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