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Two Individuals A\mathrm { A } And B\mathrm { B } , Consume Two Goods

question 18

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Two individuals, A\mathrm { A } and B\mathrm { B } , consume two goods, xx and yy . Together they have 4 units of xx and 8 units of yy . For Consumer A\mathrm { A } the MRSx,yA=5x3yM R S _ { x , y } ^ { A } = \frac { 5 x } { 3 y } and for Consumer B\mathrm { B } the MRSx,yB=3xyM R S _ { x , y } ^ { B } = \frac { 3 x } { y } . Which of the following allocations is an efficient allocation of goods xx and yy ?

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Definitions:

Credit Memo

A document issued by a seller that reduces the amount owed by a buyer, typically due to a return or refund.

Cash Discount

A cash discount is a reduction in the price of goods or services allowed by the seller to encourage prompt payment by the buyer.

FOB Shipping Point

A term used in shipping agreements indicating that the buyer assumes responsibility and ownership of goods once they leave the seller's premises.

Perpetual Inventory System

An accounting method that continuously updates inventory records for every purchase and sale.

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