Question
Consider an exchange economy with two agents, 1 and 2,
and two goods, X and Y. Each agent's consumption set is in +R2. The endowments of agents 1 and 2 are (10, 1) and (0, 9) respectively. In any commodity bundle, the first entry is the quantity of X, and the second entry is the quantity of Y. If a>c, or a=c and b>d, then Agent 1 strictly prefers bundle (a,b) to (c,d). If b>d, or b=d and a>c, then Agent 2 strictly prefers bundle (a,b) to (c,d). Which of the following allocations is an efficient allocation?Solution
The allocation where Agent 1 gets (10,1) and Agent 2 gets (0,9) is an efficient allocation because it respects their initial endowments and preferences, and any change would make at least one agent worse off.
Linear model of communication involves: -
What is the feature launched by ICICI Lombard General Insurance for health insurance policyholders to avail cashless facilities at any hospital?
What is monetary base?
How much did IIFCL invest in Infrastructure Investment Trusts (InvITs) during FY2023-24, as mentioned in the Annual Report of IIFCL 2023-24?
Marketable securities are primarily:
The cost of capital for a firm _______.
What can be the maximum proportion of base size for anchor investors can be decided by an issuer at EBP?
A bank provides Letter of Credit (LC) for ₹1 crore. If the LC commission is 1% p.a. for 90 days, how much income will the bank earn?
According to the IFSCA Regulations 2024, the Board may establish sub-committees. What is the main purpose of these sub-committees?
Recently RBI approved five banks to work with it on a pilot project for its digital currency -- the Digital Rupee, which of the following is not in the ...
