4. Your are the social planner for a world with three people. There are 8 possible outcomes which give each individual the utility (in "utils") shown in the table below. Outcome A D G Н Utility of Individual #1 Utility of Individual #2 Utility of Individual #3 You like all these individuals, although not necessarily equally. 2 13 15 13 3 14 4 12 13 12 18 4 14 5 15 24 11 3 5 17 12 18 (a) Which outcomes are Pareto Efficient? Which are not? Explain your reasoning. (b) As an economist, which of the Pareto Efficient outcomes is the most desirable? Explain. (c) As an economist, would you choose one of the outcomes that is not Pareto Efficient? Explain. (d) Suppose the "world" is initially at an allocation that is not Pareto Efficient. Will all of the Pareto Efficient outcomes identified in part (a) be a Pareto Improvement? Explain.
4. Your are the social planner for a world with three people. There are 8 possible outcomes which give each individual the utility (in "utils") shown in the table below. Outcome A D G Н Utility of Individual #1 Utility of Individual #2 Utility of Individual #3 You like all these individuals, although not necessarily equally. 2 13 15 13 3 14 4 12 13 12 18 4 14 5 15 24 11 3 5 17 12 18 (a) Which outcomes are Pareto Efficient? Which are not? Explain your reasoning. (b) As an economist, which of the Pareto Efficient outcomes is the most desirable? Explain. (c) As an economist, would you choose one of the outcomes that is not Pareto Efficient? Explain. (d) Suppose the "world" is initially at an allocation that is not Pareto Efficient. Will all of the Pareto Efficient outcomes identified in part (a) be a Pareto Improvement? Explain.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education