If Two People Have Identical Cobb-Douglas Utility Functions, Then in Every

question 21

True/False

If two people have identical Cobb-Douglas utility functions, then in every Pareto optimal allocation, they must consume all goods in the same proportions as each other.

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Definitions:

Government

The organization that governs or administers a specific territory or country, responsible for creating and enforcing laws, policies, and regulations.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to buy at a particular price.

Rent Controls

Government-imposed maximum rents to cap how much landlords can charge tenants, intended to make housing more affordable.

Rent Control Ceiling

A legal maximum price that can be charged for rental housing, intended to keep housing affordable for tenants.