This exchange economy has two consumers, consumer A (Anil) and consumer B (Ben), and two goods, 1 and 2.
There are 20 units of good 1 available and 20 units of good 2. That is, wA + wB = 20 and w1 + w2 = 20
Time left 0:54:04
is an initial endowment, with the goods indicated by the subscripts and the consumers indicated by the superscripts.
Assume consumer A's and consumer B's preferences are described by:
UA= VIP・ VrE and UB = 2.xP
x and Us = 2. imes B . imes B , where each x is the consumption of a good by a consumer.
Note that the Marginal Utilities (MU) can be written as:
MUA=(1)/(2): N//A
MV =일씨 처
MUP = 2. 일을
MUE=2・xP
For each of the following allocations for A and for B, indicate with a tick if the allocation is Pareto efficient.
• A: (6, 6) and B: (14, 14)
• A: (19, 19) and B: (1, 1)
A
• A: (13, 1) and B: (7, 19)
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• A: (17, 17) and B: (3, 3)
• A: (12, 13) and B: (8, 7)
• A: (1, 1) and B: (19, 19)