In a two- person to good world,if the initial endowment is such both persons have the same MRS then
A)there may or may not be a trade possible
B)there is another allocation which makes everyone better off
C)the initial endowment is Pareto optimal
D)there is some price at which a Pareto improving trade exists

Question

Quizplus · Accepted Answer

If both persons have the same MRS, the initial endowment is Pareto optimal, meaning that it is not possible to make one person better off without making the other person worse off. Therefore, options A, B, and D are incorrect.

In a Two- Person to Good World,if the Initial Endowment