Question: Any ideas about these tf Economic efficiency question? Consider an economy with two people, Donald and Melania, with two goods: yachts (denoted y) and condos

 Any ideas about these tf Economic efficiency question? Consider an economywith two people, Donald and Melania, with two goods: yachts (denoted y)

Any ideas about these tf Economic efficiency question?

and condos (denoted c). There are 10 yachts and 20 condos inthe economy. Both people have the same utility function, U'(y, c) =

Consider an economy with two people, Donald and Melania, with two goods: yachts (denoted y) and condos (denoted c). There are 10 yachts and 20 condos in the economy. Both people have the same utility function, U'(y, c) = yl/3cl/3. (Assume the goods can be consumed in continuous measure, not just integers-i.e., Donald can consume 0.01 yachts). True or False: An allocation in which Donald has 10 yachts and 20 condos (and Melania has 0 of both) is Pareto efficient. (2 points) True or False: An allocation where Donald has 10 yachts and 12 condos (and Melania has 0 yacht and 8 condos) is Pareto efficient. (2 points)Assume that the social welfare function is the sum of Donald and Melania's utility. If the social planner can choose the final allocation, how many yachts and condos when the planner allocate to Melania (giving Donald the rest ) in order to maximize social welfare? (2 points) True or False: The allocation that you found in the prior step (number 6), which maximizes the social welfare function, is the only Pareto efficient allocation. (2 points) True or False: Moving from the allocation in number 5 to the welfare maximizing allocation in number 6 is a Pareto improvement. (2 points)

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