Q.3(a) Provide a formal rigorous-proof of Sen's theorem that Liberalism and ParetoOptimality are incompatible.(b) Consider an economy with 15 consumers and 2 goods. Consumer 3 has utilityfunction U³ = X₁ + X2 At a certain Pareto efficient allocation, consumer 3 hasan allocation (10, 0). What can you say about the competitive prices thatsupport this Pareto Optimal allocation? Explain your answer.

Sen’s security of capitalism does to the idea that its sensation pivots on its method of regulation…

(a) Provide a formal rigorous-proof of Sen's theorem that Liberalism and Pareto Optimality are incompatible. (b) Consider an economy with 15 consumers and 2 goods. Consumer 3 has utility function U³ = X₁ + X₂ At a certain Pareto efficient allocation, consumer 3 has an allocation (10, 0). What can you say about the competitive prices that support this Pareto Optimal allocation? Explain your answer.

(a) Provide a formal rigorous-proof of Sen's theorem that Liberalism and Pareto Optimality are incompatible. (b) Consider an economy with 15 consumers and 2 goods. Consumer 3 has utility function U³ = X₁ + X₂ At a certain Pareto efficient allocation, consumer 3 has an allocation (10, 0). What can you say about the competitive prices that support this Pareto Optimal allocation? Explain your answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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