Adelino and Benito Consume Only Two Goods, X and Y

question 61

Multiple Choice

Adelino and Benito consume only two goods, X and Y. They trade only with each other and there is no production. Adelino's utility function is given by U(x_A, y_A) = 2x_A + 5y_A and Benito's utility function is given by U(x_B, y_B) . In the Edgeworth box constructed for Adelino and Benito, the set of Pareto optimal allocations is

• A) the main diagonal.
• B) both diagonals.
• C) the entire contents of the Edgeworth box.
• D) the right and left edges of the box.
• E) the upper and lower edges of the box.

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Definitions:

Relationship Between Variables

The way in which two or more variables are associated with one another, which can be positive, negative, or neutral in nature.

Degree

A unit of measurement used in various contexts, such as angle measurement in geometry, temperature scaling, or academic achievement.

Hypothesized Mean Difference

The proposed difference between the means of two populations or groups in a statistical hypothesis test.

Conducting T Test

A statistical procedure used for assessing whether the mean values of two separate groups differ significantly.