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Economics - Financial Markets
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OpenStudy (anonymous):
1. Exchange economy. Optimality. 1. Exchange economy. Optimality. Two agents (a and b), two goods (1 and 2). With the usual notations: Ua(x1, x2) = x1x2 , Ub(x1, x2) = x1x22 , ω1 = 6 , ω2 = 8. a) Is the allocation A: xa = (4,4), xb = (2,4) a Pareto optimal allocation? b) Same question for B: xa = (3, 4), xb = (3, 4). c) Does A Pareto-dominate B?
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