Describe using the definition why you know it is not pareto

Reference no: EM13392293

An economy is currently made up of a firm that produces bread, a firm that produces butter, and a consumer who consumes both bread and butter. Current production is 100 units of bread, 50 units of butter which the consumed by the consumer. If the output changed to 75 units of bread and 60 units of butter, the profit of the butter firm would go up by $42. The profit of the bread firm would go down by $76. The consumer prefers 75 bread and 60 butter to 100 bread and 50 butter. It is so much better that the consumer would pay $40 more to have 75 bread and 60 butter rather than have 100 bread and 50 butter. Explain, using the definition, why you know it is not Pareto Efficient to have the economy produce 100 bread and 50 butter.

Reference no: EM13392293

Questions Cloud

Should an organization have the right to select employees : 1. should an organization have the right to select employees without the governmentrsquos intervention? explain your

It appears consumers will continue to pay the positive : a demand curve is given by the following equationnbspanbsp find two points nbspon the demand curvebnbsp calculate the

Prepare bobs journal entry to record the issuance of the : on november 1 bobs skateboards signed a 12000 90-day 5 note payable to cover a past due account payable. required a.

Describe the importance of identifying norms within a team : discuss the importance of identifying norms within a team? why is clear communication considered an essential element

Describe using the definition why you know it is not pareto : an economy is currently made up of a firm that produces bread a firm that produces butter and a consumer who consumes

A way for timrsquos coffee shoppe to determine the : a way for timrsquos coffee shoppe to determine the advantages or weaknesses timrsquos has as compared to their

Show any calculations used to find out whether firm will : a firm has the choice of the following investmentsinvestment a costs 5000 today pays a total of 4000 next year and

Describe the dynamics of how self esteem affects self : explain the dynamics of how self esteem affects self efficacy? provide an example of an internal or external force that

Explain the similarities and differences between the erg : describe the similarities and differences between the erg theory and maslows hierarchy. how have you used either of the

User Account

All Pages