Q: Pareto Efficiency
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A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
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- Provide the critic of the cardinal utility and justify how the ordinal or indifference theory is superior to the cardinal utility.How a demand curve can bederived within a budget constraint-indifference curve framework? please Explain.What assumptions are required for the two fundamental theorems of welfare economics to hold? Are these so strong that the theorems are devoid of practical relevance?
- Explain why the Fundamental Theorem of Welfare Economics implies that there is no intrinsic trade-off between efficiency and interpersonal equity. Demonstrate the argument using two Edgeworth box, making sure that you describe all the elements of the box appropriately.Discuss how the utility-maximization model helps highlight the income and substitution effects of a price change.The non-satiation assumption we make about people's's preferences entails that the indifference curves never cross. True or False
- Show using well labeled diagrams how you would derive the Marshallian Demand curve and compensated demand curve holding utility constant for an Inferior good X for a consumer maximizing her welfare subject to a budget constraint.How does the utility-maximization model help highlight the income and substitution effects of a price change. Provide an example please.Which of the following statements best describes how individuals maximize their utility given a constraint? a) this can be shown when the budget constraint is tangent to the highest indifference curve b) this can be shown when the budget constraint is tangent to the highest indifference curve well above the contraint c) none of these possible answers make sense d) this can be shown when the budget constraint is tangent to the lowest indifference curve possible
- Suppose X = R k + for some k ≥ 2, and we define x = (x1 , …, xk ) ≥ = (y1 , …, yk ) if x ≥ y; that is, if for each i = 1, …, k, xi ≥ yi . (This is known as the Pareto ordering on R k + ; it plays an important role in the context of social choice theory in Chapter 8.) (a) Show that ≥ is transitive but not complete. (b) Characterize ≥ Is asymmetric? Is≥ Negatively transitive? Prove your assertions. (c) Characterize ~ defined from ≥ in the usual fashion; that is, x ~ y if x ≥ y and y x. Is ~ reflexive? Symmetric? Transitive? Prove your assertions.Along an indifference curve, if the marginal rate of substitution is 3, then the consumer is willing to Select one: a. Give up 3 units of the good measured along they-axis for 1 unit of income, that is, $1 of income. b. Give up 3 units of the good measured along they-axis for 1 unit of the good measured along the x-axis. c. Pay $3 for one unit of the good measured along the y-axis d. Give up 1 unit of the good measured along the y-axis for 3 units of the good measured along the x-axis e. Pay $3 for one unit of the good measured along the x-axisPlease tell me which of the multiple choices in question 1.6)1.7)1.8) are correct.State only the correct ones please. 1.6) The marginal rate of substitution (MRS) can be defined as: Select one or more: a. The amount of one good that the consumer is willing to trade for one unit of the other. b. The ratio of the amounts of two goods. c. The change in the consumer’s utility when one good is substituted for another. d. The absolute value of the slope of the indifference curve. 1.7) (SEE ATTACHED PICTURE) The diagram shows that: Select one or more: a. If Angela works 24 hours a day she can still survive. b. There is a technically feasible allocation where Angela does not work. c. A new technology that produced more grain would give a larger technically feasible set. d. If Angela needed less grain to survive the technically feasible set would be smaller.