3. David has utility function U (xy)-minf3K 3yg. He has 13 units of good ? and 9

Question

3. David has utility function U (xy)-minf3K 3yg. He has 13 units of good ? and 9 units of y. Aner's utility function for the same two goods is U(x; y)- 2x 2y. Aner has 6 units of x and 15 units of y. The current allocation is (a) Pareto optimal and envy free (neither envies the allocation of the other) (b) Not Pareto optimal and not envy free. (c) Pareto optimal and not envy free. (d) Not Pareto optimal and envy free. (e) Since they have di8erent preferences, there is not enough information to determine the answer.

Explanation / Answer

After reviewing the utility functions the answer seems (e) Since they have different preferences, there is not enough information to determine the answer.

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