Marshmallow 1 and Marshmallow 2 want to watch animated shows. There is only one device between them (mother refuses to lend out her phone), and they can only stream one show. The following table gives the benefits to each of them for two possible shows: Marshmallow 1 Marshmallow 2 Benefits from watching Bluey ($) 6 10 Benefits from watching Hey Duggee ($) 3 12 Suppose it is possible for monetary transfers between Marshmallow 1 and Marshmallow 2. If mother decides to stream Bluey: O the outcome is Pareto efficient because the total benefit is maximised. O the outcome is Pareto efficient because the division of benefits is more equal. O the outcome is Pareto inefficient because Marshmallow 2's benefit from Hey Duggee is the highest among all individual benefits. There is insufficient information to determine Pareto efficiency.
Marshmallow 1 and Marshmallow 2 want to watch animated shows. There is only one device between them (mother refuses to lend out her phone), and they can only stream one show. The following table gives the benefits to each of them for two possible shows: Marshmallow 1 Marshmallow 2 Benefits from watching Bluey ($) 6 10 Benefits from watching Hey Duggee ($) 3 12 Suppose it is possible for monetary transfers between Marshmallow 1 and Marshmallow 2. If mother decides to stream Bluey: O the outcome is Pareto efficient because the total benefit is maximised. O the outcome is Pareto efficient because the division of benefits is more equal. O the outcome is Pareto inefficient because Marshmallow 2's benefit from Hey Duggee is the highest among all individual benefits. There is insufficient information to determine Pareto efficiency.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:QUESTION 19
Marshmallow 1 and Marshmallow 2 want to watch animated shows. There is only one device between them (mother refuses to lend out her phone),
and they can only stream one show. The following table gives the benefits to each of them for two possible shows:
Marshmallow 1
Marshmallow 2
Benefits from watching Bluey ($)
6
10
Benefits from watching Hey Duggee ($)
3
12
Suppose it is possible for monetary transfers between Marshmallow 1 and Marshmallow 2. If mother decides to stream Bluey:
the outcome is Pareto efficient because the total benefit is maximised.
the outcome is Pareto efficient because the division of benefits is more equal.
the outcome is Pareto inefficient because Marshmallow 2's benefit from Hey Duggee is the highest among all individual benefits.
There is insufficient information to determine Pareto efficiency.
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