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The table above provides reservation prices and costs for the inhabitants of Econland. Suppose we have an allocation where D3, D4, D5, D6, and D7
The table above provides reservation prices and costs for the inhabitants of Econland. Suppose we have an allocation where D3, D4, D5, D6, and D7 each consume a widget and S1, S2, S3, S4, and S5 each produce a widget. This is not Pareto efficient because a) S10 can produce a widget for D2, and D2 can give $8.50 to S10, and both are better off. b) the quantity is below the socially efficient level. c) D4 can give his widget to D2, and D2 can give $7 to D4, and both are better off. d) D7 can give his widget to D1, and D1 can give $9.5 to D7, and both are better off. e) None of the above. 8. Suppose we have an allocation where S1,S2,S3,S4,S5, S6, S7 each produce a widget and D1,D2,D3,D4,D5,D6, D7 each consume a widget. This is not Pareto efficient because a) we can have S9 sell to D1 for $9, S8 sell to D2 for $8, S7 sell to D3 for $7, and so on up to S1 sell to D9 for $1, and this will maximize output. b) S8 can sell a widget to D8 for $8 and both are better off
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