1. Explain, based on the given information about the economy, whether the current situation for the economy is Pareto efcient or not. If it is not, give a specic example of a change that makes someone better off and no one worse off. If it is PE. explain why every change that helps someone hurts someone else. (1 point each) a) An economy is currently made up of a rm that produces bread. a rm that produces butter, and a consumer who consumes both bread and butter. Current production is 100 units of bread. 50 units of butter which the consumed by the consumer. If the output changed to 75 units of bread and 60 units of butter. the prot of the butter rm would go up by $42. The prot of the bread rm would go down by $76. The consumer prefers 75 bread and 60 butter to 100 bread and 50 butter. It is so much better that the consumer would pay $40 more to have 75 bread and 60 butter rather than have 100 bread and 50 butter. b) An economy has two consumers. a total fixed production of 7 apples and B oranges. Both goods are only available in whole quanties. Currently consumer R has 6 apples and 7 oranges and consumer P has the remaining apples and oranges. For Consumer R. 6 apples and 7 oranges (current allocation) is indifferent to 7 apples and 5 oranges as well as 3 apples and 8 oranges. For Consumer P, 1 apple and 1 orange (current allocation) is indifferent to 0 apples and 3 oranges as well as 4 apples and 0 oranges