Suppose that 2 roommates, Andy and Bob, are trying to pick an apartment in Chicago. Locations can be chosen from set of alternatives A={ x: x exists [0,1]}. Andy and Bob both want to minimize their daily commute but they work at different locations: Andy at xA=0.3, while Bob at xB=0.6. Specifically, their utility functions are: ui(x)= -(x-xi)2. Question: What is the set of all Pareto Efficient outcomes in A, assuming no money can be exchanged

Suppose that 2 roommates, Andy and Bob, are trying to pick an apartment in Chicago. Locations can be chosen from set of alternatives A={ x: x exists [0,1]}. Andy and Bob both want to minimize their daily commute but they work at different locations: Andy at xA=0.3, while Bob at xB=0.6. Specifically, their utility functions are: ui(x)= -(x-xi)2. Question: What is the set of all Pareto Efficient outcomes in A, assuming no money can be exchanged

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 8QP

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