Mubita and Akakulubelwa live in the Liuwa national park in Westen Province of Zambia. They consume only two goods, wild fruits (W) and game meat (G). Currently Mubita consumes 10W’s and 5G’s, while Akakulubelwa consumes 3 W’s and 9 G’s. Mubita’s Marginal rate of substitution for W to G is one and Akakulubelwa’s Marginal rate of substitution is 0.5. Is the allocation provided above Pareto efficient? If so, explain why. If not, show a possible Pareto efficient allocation. If there was a competitive market for each type of posters, would these markets produce Pareto efficient allocation?
Mubita and Akakulubelwa live in the Liuwa national park in Westen Province of Zambia. They consume only two goods, wild fruits (W) and game meat (G). Currently Mubita consumes 10W’s and 5G’s, while Akakulubelwa consumes 3 W’s and 9 G’s. Mubita’s Marginal rate of substitution for W to G is one and Akakulubelwa’s Marginal rate of substitution is 0.5. Is the allocation provided above Pareto efficient? If so, explain why. If not, show a possible Pareto efficient allocation. If there was a competitive market for each type of posters, would these markets produce Pareto efficient allocation?
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.11P
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Mubita and Akakulubelwa live in the Liuwa national park in Westen Province of Zambia. They consume only two goods, wild fruits (W) and game meat (G). Currently Mubita consumes 10W’s and 5G’s, while Akakulubelwa consumes 3 W’s and 9 G’s. Mubita’s Marginal rate of substitution for W to G is one and Akakulubelwa’s Marginal rate of substitution is 0.5.
- Is the allocation provided above Pareto efficient? If so, explain why. If not, show a possible Pareto efficient allocation.
- If there was a competitive market for each type of posters, would these markets produce Pareto efficient allocation?
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