(Figure: Cereal and Pancakes I) the Market Prices for Cereal

question 20

Multiple Choice

(Figure: Cereal and Pancakes I) The market prices for cereal and pancakes are $2 and $1, respectively. Pareto efficiency requires that the marginal rate of substitution of cereal for pancakes equal _____ for Elaina and _____ for Jose.

• A) 2; 1/2
• B) 1/2; 2
• C) 2; 2
• D) 2; 1