Consider a Robinson Crusoe economy where Crusoe starts with 20 units of time (good 1) and no units of the consumption good (good 2). Crusoe owns the firm with technology given by y={y € R²|y₁ ≤0, y₂ <1- y₁}. Crusoe has utility function u = x₁ + x² Which 2 of the following 8 options are true: O Every Walrasian Equilibrium must be Pareto efficient. O There are infinitely many Pareto efficient allocations. The production set satisfies constant returns to scale. O The production set satisfies possibility of inaction but violates no free lunch. The production set violates free-disposal. The production set is closed. O Crusoe's preferences satisfy convexity. The production set violates convexity.

Consider a Robinson Crusoe economy where Crusoe starts with 20 units of time (good 1) and no units of the consumption good (good 2). Crusoe owns the firm with technology given by y={y € R²|y₁ ≤0, y₂ <1- y₁}. Crusoe has utility function u = x₁ + x² Which 2 of the following 8 options are true: O Every Walrasian Equilibrium must be Pareto efficient. O There are infinitely many Pareto efficient allocations. The production set satisfies constant returns to scale. O The production set satisfies possibility of inaction but violates no free lunch. The production set violates free-disposal. The production set is closed. O Crusoe's preferences satisfy convexity. The production set violates convexity.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Welfare analysis of the society is related to welfare economics. From the economic point of view former welfare economics refers to that subject which uses the techniques of microeconomics to analyse and evaluate the welfare at the economic or aggregate level.

Question

Consider a Robinson Crusoe economy where Crusoe starts with 20 units of time (good 1) and no units of the consumption good (good 2). Crusoe owns the firm with
technology given by y={y ER²|y₁ ≤0, y₂ <1- y₁}. Crusoe has utility function u = x₁ + x²
Which 2 of the following 8 options are true:
Every Walrasian Equilibrium must be Pareto efficient.
O There are infinitely many Pareto efficient allocations.
The production set satisfies constant returns to scale.
O The production set satisfies possibility of inaction but violates no free lunch.
O The production set violates free-disposal.
The production set is closed.
O Crusoe's preferences satisfy convexity.
O The production set violates convexity.

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