In a simple economy there are 2 inputs, each fixed in supply. These inputs are owned by two consumers. Inputs are used either in the production of r or of y. For simplicity you should assume there are only two firms. (c) Explain as precisely and concisely as you can why each of these conditions must be satisfied. (d) What additional condition(s) for Pareto Efficiency must be satisfied if there are three rather than two inputs used in the production of each output?

In a simple economy there are 2 inputs, each fixed in supply. These inputs are owned by two consumers. Inputs are used either in the production of r or of y. For simplicity you should assume there are only two firms. (c) Explain as precisely and concisely as you can why each of these conditions must be satisfied. (d) What additional condition(s) for Pareto Efficiency must be satisfied if there are three rather than two inputs used in the production of each output?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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