Consider an Edgeworth-box economy, which contains two individuals i and j, and two goods (and2. The total endowment of good I is 8, and the total endowment of good 2 is 4. Individual i hasthe Leontief utility U₂C X₁, X₁z) = min (X₂₁, Xiz) for all X₁, Xiz 20, while individual j has theLinear utility U₁ (Xj₁, Xj₂)=Xj₁t Xj₂ for all X₁, Xyzzo, which allocation below this is not Patretoefficient / optimala. (( X ²1, Xit), (X₁₁ + X₁²₂)) =((2, 2), (6,2))6. (( X ₂₁, Xiv), (X; ₁ ; X₁3₂)) = (C0₁0), (814))c. (CX₁, Xt₂), (X3³₁, X₁₂)) = (( 8₁4), (0, 0))d. ((x), X₁₂), (X₁, X3₂)) =((4,4), (4,0))

Pareto performance or optimality refers to a kingdom in which sources are allotted in this type of…

Answered: Edgeworth-box economy

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Economics

Edgeworth-box economy

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Question

Consider an Edgeworth-box economy, which contains two individuals i and j, and two goods (and
2. The total endowment of good I is 8, and the total endowment of good 2 is 4. Individual i has
the Leontief utility U₂C X₁, X₁z) = min (X₂₁, Xiz) for all X₁, Xiz 20, while individual j has the
Linear utility U₁ (Xj₁, Xj₂)=Xj₁t Xj₂ for all X₁, Xyzzo, which allocation below this is not Patreto
efficient / optimal
a. (( X ²1, Xit), (X₁₁ + X₁²₂)) =((2, 2), (6,2))
6. (( X ₂₁, Xiv), (X; ₁ ; X₁3₂)) = (C0₁0), (814))
c. (CX₁, Xt₂), (X3³₁, X₁₂)) = (( 8₁4), (0, 0))
d. ((x), X₁₂), (X₁, X3₂)) =((4,4), (4,0))

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