Question: Kens utility function is U(QK, WK) = QK WK and Barbies utility function is U(QB, WB) = QB WB. If Kens initial endowment were

Kens utility function is U(QK, WK) = QK WK and Barbies utility

Kens utility function is U(QK, WK) = QK WK and Barbies utility function is U(QB, WB) = QB WB. If Kens initial endowment were 5 units of quiche and 9 units of wine and Barbies endowment were 10 units of quiche and 9 units of wine, then at any Pareto optimal allocation where both persons consumed some of each good, a. Ken would consume 15 units of quiche for every 18 units of wine that he consumed. b. Barbie would consume twice as much quiche as Ken. c. Ken would consume 5 units of quiche for every 9 units of wine that he consumed. d. Barbie would consume 10 units of quiche for every 9 units of wine that she consumed. e. None of the above. Show your work.

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SOLUTION Lets start by analyzing the utility functions of Ken and Barbie UQKWK QK Wx UQBWB QB WB From the Pareto optimality condition we know that the ... View full answer

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