Question
Suppose there are two consumers, A and B, and two goods, X and Y. Consumer A views the two goods as perfect complements and has
Suppose there are two consumers, A and B, and two goods, X and Y. Consumer A views the two goods as perfect complements and has U=min(X,Y). Consumer B views the two goods as perfect substitutes and has U=X+Y. There are 20 units of good X and 10 units of good Y available. For each of the following allocations, state TRUE if the allocation is Pareto efficient, and FALSE if it is not.
i) Consumer A gets all of both goods.
ii) Consumer B gets all of both goods
iii) Consumer A gets 5 units of each good, and consumer B gets 15 units of good X and 5 units of good Y.
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