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August 22, 2014

August 22, 2014

Posted by **Brett** on Thursday, February 19, 2009 at 10:49am.

- college Econ -
**economyst**, Friday, February 20, 2009 at 9:24amSo for Fred, Z and B are efficiently allocated when Z=B. Further, there are no diminishing returns. That is MU at Z0=B0 is the same as MU at Z1=B1. For Ethel, like Fred, there are no diminishing returns. However, efficient allocation calls for 2Z=B.

So, it may not be equitable, but one efficient allocation is to give everything to Ethel.

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