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In an economy, there is a consumer who consumes a consumer good. Its usefulness is given by U(C)=C , where C is its consumption. The
In an economy, there is a consumer who consumes a consumer good. Its usefulness is given by U(C)=C, where C is its consumption. The production of this consumer good is given by:
Yc = (ly)0.3*E0.7
lY being the amount of labor used directly in the production of the consumer good and E the total amount of energy spent in producing this good. Total energy production is given by:
YE = lE,
lE being the total amount of work spent on energy production. The total workload is 20.
Formulate the Pareto problem (which generates efficient allocations).
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