Why does efficiency in consumption require the MRS of all consumers to be the same?
Answer to relevant QuestionsWhat is your opportunity cost of reading a novel this evening?Why might voters in a country choose a non-Pareto-optimal allocation over another that is Pareto optimal?Suppose Sarah has an endowment of 2 units of X and 4 units of Y and has in-difference curves that satisfy our four basic assumptions (see Chapter 3). Sup-pose Brian has an endowment of 4 units of X and 2 units of Y, and has ...There are two industries in a simple economy, each of which faces the same marginal cost of production. One of the industries is perfectly competitive, the other a pure monopoly. Describe a reallocation of resources that ...A government is trying to decide how much of a public good to provide. The willingness-to-pay curves for each of its two citizens are as given in the diagram. The marginal cost curve for the public good is given by MC = Q/2, ...
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