5. Consider an Edgeworth box economy where preferences are given by u'lat,x) = x}x and uai,3) = x, (a) Suppose the initial endowments are e' = (4,4) and e = (1,1). Find all the Pareto optimal allocations. (b) Suppose the initial endowments are e' = (5,5) and e = (0,0). Find all the Pareto optimal allocations.
5. Consider an Edgeworth box economy where preferences are given by u'lat,x) = x}x and uai,3) = x, (a) Suppose the initial endowments are e' = (4,4) and e = (1,1). Find all the Pareto optimal allocations. (b) Suppose the initial endowments are e' = (5,5) and e = (0,0). Find all the Pareto optimal allocations.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![5. Consider an Edgeworth box economy where preferences are given by
u'(x},*}) = x}x and uai,) = xf,
(a) Suppose the initial endowments are e' = (4,4) and e² = (1,1). Find all
the Pareto optimal allocations.
(b) Suppose the initial endowments are e' = (5,5) and e = (0,0). Find all
the Pareto optimal allocations.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F93d78a7c-cba1-4331-9699-87fb481e1060%2Fd4598013-e565-49ab-9046-1167c4fbe0a2%2Fbdarg4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:5. Consider an Edgeworth box economy where preferences are given by
u'(x},*}) = x}x and uai,) = xf,
(a) Suppose the initial endowments are e' = (4,4) and e² = (1,1). Find all
the Pareto optimal allocations.
(b) Suppose the initial endowments are e' = (5,5) and e = (0,0). Find all
the Pareto optimal allocations.
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