A small economy has only two consumers, Harold and Irene. Harold's utility function is U(x, y) = x + 50y1/2. Irene's utility function is U(x, y) = x + 5y. Harold is endowed with 500 units of x and 60 units of y. They make trades to reach a Pareto optimal allocation of resources in which both persons consume positive amounts. How much y does Harold consume? 50 units 25 units 28 units 23 units There is not enough information to determine how much y he will consume.

A small economy has only two consumers, Harold and Irene. Harold's utility function is U(x, y) = x + 50y1/2. Irene's utility function is U(x, y) = x + 5y. Harold is endowed with 500 units of x and 60 units of y. They make trades to reach a Pareto optimal allocation of resources in which both persons consume positive amounts. How much y does Harold consume? 50 units 25 units 28 units 23 units There is not enough information to determine how much y he will consume.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 1P

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