Question 6. Suppose there are two consumers, A and B, and 2 goods, X and Y. The utility functions of each consumer are given by: UA(X,Y)= 3X + Y UB(X,Y)= MIN (X, 2Y)
Question 6. Suppose there are two consumers, A and B, and 2 goods, X and Y. The utility functions of each consumer are given by: UA(X,Y)= 3X + Y UB(X,Y)= MIN (X, 2Y)
Chapter1: Making Economics Decisions
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![Question 6. Suppose there are two consumers, A and B, and 2 goods, X and Y. The utility
functions of each consumer are given by:
UA(X,Y)= = 3X + Y
UB(X,Y)= MIN (X, 2Y)
The initial endowments are:
A: X = 2; Y = 6
B: X = 6; Y = 2
Jsing an Edgeworth Box, illustrate the initial endo ments. Also, for each
consumer, draw the indifference curve that runs through the initial endowment. Be sure to label
your graph carefully and accurately.
2
]
Is the initial allocation Pareto Efficient?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0bfeb90e-22e6-4ede-a4eb-428bfbf3c4aa%2F736a527e-c527-4b19-8e22-bc8e21d62d58%2F86mc0vg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 6. Suppose there are two consumers, A and B, and 2 goods, X and Y. The utility
functions of each consumer are given by:
UA(X,Y)= = 3X + Y
UB(X,Y)= MIN (X, 2Y)
The initial endowments are:
A: X = 2; Y = 6
B: X = 6; Y = 2
Jsing an Edgeworth Box, illustrate the initial endo ments. Also, for each
consumer, draw the indifference curve that runs through the initial endowment. Be sure to label
your graph carefully and accurately.
2
]
Is the initial allocation Pareto Efficient?
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