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Business, 23.03.2020 22:06 lovelyashjoy
Economania is a closed island economy where two goods A and B are each produced by many identical perfectly competitive firms using labor L and some input X according to standard production functions. If all these goods were pure private goods, what is the necessary condition for Pareto optimality with respect to assigning X and L to produce the two goods? Why would the competitive equilibrium satisfy this condition? Assume instead that the use of input X to produce A causes harm to industry B. That is, an increase in X used to prod
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Economania is a closed island economy where two goods A and B are each produced by many identical pe...
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