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= - There are two goods (1 and 2) and two consumers (A and B) in an exchange economy. Consumer A is endowed with 1
= - There are two goods (1 and 2) and two consumers (A and B) in an exchange economy. Consumer A is endowed with 1 unit of good 1 and consumer B is endowed with 1 unit of good 2. The utility function of consumer A is U. = 2ln(x1a) + ln(x2a) and the utility function of consumer B is Ug = ln(x1b) + 2ln(X26). Xia and X2a are the consumption of good 1 and 2 by consumer A respectively. X16 and X26 are the consumption of good 1 and 2 by consumer B respectively. A social planner tries to maximise social welfare defined as W = U, + Ub for the exchange economy. Let xia, xa, Xib, x.l be the social planner allocation to the social planner problem, i.e. the allocation that maximize the social welfare. Which of the following is not true for xia, xa, xib, x26? 2a 2b ' ' 2b a. Xia + xio - 1 la b. x2b = 2xa = C. 3x = xla = 1b d. 2x1b = xia =
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