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

Question 28

Multiple Choice

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 ?


A) Consumer A has 5 units of xx and 3 units of yy , and Consumer B has 3 units of xx and 1 unit of yy .
B) Consumer A has 3 units of xx and 5 units of yy , and Consumer B has 1 unit of xx and 3 units of yy .
C) Consumer A has 2 units of xx and 6 units of yy , and Consumer B has 6 units of xx and 2 units of yy .
D) Consumer A has 7 units of xx and 2 units of yy , and Consumer B has 1 unit of xx and 6 units of yy .

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