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Tom Currently Has 100 Units of X1 and 50 Units

Question 11

Multiple Choice

Tom currently has 100 units of x1 and 50 units of x2, and Jan has 50 units of x1 and 100 units of x2. If Tom's marginal rate of substitution is 10, and Jan's is 1:


A) Pareto- improving trades involve Jan giving up x2 for x1.
B) Pareto- improving trades involve Tom giving up x1 for x2.
C) Pareto- improving trades between Jan and Tom do not exist.
D) Pareto- improving trades exist but cannot be assessed given the above information.

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