Consider the following scenario to answer the next three questions. Ms. Franklin makes necklaces, with an opportunity cost of 2 jewelry boxes per every 3 necklaces. Ms. Lincoln makes jewelry boxes, with an opportunity cost of 4 necklaces per every 3 jewelry boxes. Ms. Green proposes that Ms. Franklin give Ms. Lincoln 1 necklace in exchange for 3 jewelry boxes. What are Ms. Franklin's and Ms. Lincoln's reactions?

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A:

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Welfare Analysis

Welfare analysis of the society is related to welfare economics. From the economic point of view former welfare economics refers to that subject which uses the techniques of microeconomics to analyse and evaluate the welfare at the economic or aggregate level.