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Economic There are three people and two goods in an economy. The utility functions and initial bundles are given below: u1 = x11x12 1 =
Economic
There are three people and two goods in an economy. The utility functions and initial bundles are given below: u1 = x11x12 1 = (0, 8) u2 = 2x21 + x22 2 = (2, 2) u3 = x31x32 + x32 3 = (8, 0) Suppose it is suggested that the three traders move to the allocation x given by x1 = (1, 2), x2 = (8, 4), x3 = (1, 4). Show that x makes no one worse off than the original allocation.
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