Question:
Consider a 2-agent, 2-good economy with an aggregate endowment of 30 units of good π and 10 units of good π. Agent π has utility function
ui (xi , yi ) = max {xi , yi }, π = 1, 2.
Select the choices below in which the specified allocation of the goods to the agents is Pareto optimal for this economy
Consider a 2-agent, 2-good economy with an aggregate endowment of 30 units of good π and 10 units of good π. Agent π has utility function
ui (xi , yi ) = max {xi , yi }, π = 1, 2.
Select the choices below in which the specified allocation of the goods to the agents is Pareto optimal for this economy
ui (xi , yi ) = max {xi , yi }, π = 1, 2.
Select the choices below in which the specified allocation of the goods to the agents is Pareto optimal for this economy
Updated On: Oct 1, 2024
- (π₯1, π¦1, π₯2, π¦2 ) = (5, 5, 25, 5)
- (π₯1, π¦1, π₯2, π¦2 ) = (10, 10, 20, 0)
- (π₯1, π¦1, π₯2, π¦2 ) = (30, 0, 0, 10)
- (π₯1, π¦1, π₯2, π¦2 ) = (0, 10, 30, 0)
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The Correct Option is C, D
Solution and Explanation
The correct options is (C): (π₯1, π¦1, π₯2, π¦2 ) = (30, 0, 0, 10) and (D): (π₯1, π¦1, π₯2, π¦2 ) = (0, 10, 30, 0)
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