Problem 1: What is a free market system? What are the basic assumptions that a free market system is based on? What are the erroneous assumptions that the free market is based on? Why are they thought to be erroneous?
Your response should be at least 300 words in length.
Problem 2: Explain how the Pareto-efficient allocation of goods also maximizes social surplus. Please provide at least one example to justify response.
Your response should be at least 500 words in length.