Suppose one of the consumers has Leontief preferences (i.e., views the two goods as perfect complements) and the other has a Cobb-Douglas utility function. If an allocation is Pareto optimal, then the two consumers who consume both goods_ while the budget line touches both consumers' indifference curves a. will not necessarily have the same MRS; at infinitely many points b. will not necessarily have the same MRS; at exactly one point c. will necessarily have the same MRS; at infinitely many points d. will necessarily have the same MRS; at exactly one point
Suppose one of the consumers has Leontief preferences (i.e., views the two goods as perfect complements) and the other has a Cobb-Douglas utility function. If an allocation is Pareto optimal, then the two consumers who consume both goods_ while the budget line touches both consumers' indifference curves a. will not necessarily have the same MRS; at infinitely many points b. will not necessarily have the same MRS; at exactly one point c. will necessarily have the same MRS; at infinitely many points d. will necessarily have the same MRS; at exactly one point
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.2P
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