Econ Trivia

First law states that any competitive equilibrium is Pareto efficient. It says market is best allocator I.e. lassiez faire is best form of economy as Pareto efficiency is automatically achieved via competitive equilibrium. Second law states that any Pareto efficient allocation is achievable as a competitive equilibrium via redistribution, for a particular price vector. It talks of how any Pareto efficient allocation is achievable through the market via redistribution of wealth.