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3. Given a production plan (x, y) on the production possibility frontier, utility possibility
frontier is given by
a) uA + uB = x
1/2
y
1/2
b) uA + uB = x + y
c) uA + uB = xy
d) None of the above
4. The grand utility possibility frontier is obtained by combining utilities (uA, uB) of the set
of pareto efficient allocations (that is, where Marginal rate of Substitution of X and Y for
the two individuals equal Marginal rate of Transformation of X and Y for the economy
with efficiency in production)
a) uA + uB = 300
b) uA + uB = 200√2
c) uA + uB = 100√2
d) None of the above
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