1.Consider these two distributions of goods between three individuals, A, B and C.

Distribution 1

A=16

B=X

C=1

Distribution 2

A=9

B=7

C=1

For Distribution 2 to be a Kaldor-Hicks improvement over Distribution 1, X has to be any number higher than:

( ) 1

( ) 2

() 3

() No Kaldor-Hicks improvement is possible