3. Suppose that there are two people in society, and the production possibilities frontier drawn below...

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3. Suppose that there are two people in society, and the production possibilities frontier drawn below represents their possible utilities. a) Consider all of the points (combinations of utility for the two people) such that C is Pareto preferred to them. On the first graph, shade the area that contains these points. (Point C is Pareto preferred to any point in this area.) b) Consider all of the feasible points (combinations of utility for the two people) that are Pareto preferred to point B. On the second graph, shade the area that contains these points. (All points in this area are Pareto preferred to point B.) c) Draw a point E that satisfies the following two statements: point C is Pareto preferred to point E and point E is Pareto preferred to point B. You may draw E on either figure, just make sure that it is labeled clearly. D Ab ●A ●B Utility of Person A •A ●B RC Utility of Person A 3. Suppose that there are two people in society, and the production possibilities frontier drawn below represents their possible utilities. a) Consider all of the points (combinations of utility for the two people) such that C is Pareto preferred to them. On the first graph, shade the area that contains these points. (Point C is Pareto preferred to any point in this area.) b) Consider all of the feasible points (combinations of utility for the two people) that are Pareto preferred to point B. On the second graph, shade the area that contains these points. (All points in this area are Pareto preferred to point B.) c) Draw a point E that satisfies the following two statements: point C is Pareto preferred to point E and point E is Pareto preferred to point B. You may draw E on either figure, just make sure that it is labeled clearly. D Ab ●A ●B Utility of Person A •A ●B RC Utility of Person A

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a You need to shade the area on the first graph where all poi... View the full answer