Essay
Answer the following questions.
a. Li's marginal rate of substitution of hamburger for steak is 1/4, and Zhang's marginal rate of substitution of hamburger for steak is 2. Is the allocation of hamburger and steak Pareto-efficient between Li and Zhang? If not, explain how Li and Zhang could be made better off.
b. Ying and Fei's marginal rate of substitution of purses for shoes is 2.5. What is the price ratio of purses to shoes?
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a. Pareto efficiency requires that the M...View Answer
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