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Question 3 (8 points) Assume there are two consumers (A and B) in an economy that have preferences that can be represented as cobb-douglas utility functions. Also assume that there are two firms that have concave production possibility frontiers over goods x and y. Which of the following conditions must be true for an allocation to be pareto efficient? Select all that apply. Producers must be operating on their production possibilities frontier. All goods in the economy are consumed. Consumers must value goods at the margin at the same rate it costs society to produce them. All producers must have marginal rates of transformation that are equal. All consumers must have marginal rates of substitution that are equal. Question 4 (8 points)ildi ginal rates of substitution that are equal. Question 4 (8 points) Consider a two consumer, two good economy where the following condition holds: MRSA > MRSB > MRT Which of the following statements is true? O The marginal benefit of x is equal to the marginal cost, so it would be a potential Pareto improvement to produce more y. The economy is distributively efficient The economy is allocationy efficient All of the above None of the above Question 5 (8 points) in the one person economy depictedQuestion 5 (8 points) below: Consider the price and income combination in the one person economy depicted 300 IC Y=FIL 200 100 0 4 8 12 16 20 24 that apply)0 4 8 12 16 20 24 Which of the following statements are true (choose all that apply) In this allocation, the price of labour must fall to achieve allocation efficiency The choice of 4 units of labour is allocationy efficient The consumer is choosing leisure in anticipation of less income from profit than they will get in competitive equilbajum The consumer is maximising utility in the consumption sector Question 6 (9 points) Consider the following figure. The blue dot labelled X, Y represents how much X and Y is currently being produced in the economy. PPF