1. The entire quantity available of a consumption good is allocated amongst seve
ID: 1129612 • Letter: 1
Question
1. The entire quantity available of a consumption good is allocated amongst several people.
Some of these people value their last unit received at $30. All of the other people value their last
unit received at $45. The total consumption value of the good
(a) is already maximized since all units of the good are already allocated.
(b) will be increased by reallocating some units from people who value them at $30 to people
who value them at $45.
(c) will be increased by reallocating some units from people who value them at $45 to people
who value them at $30.
(d) will be increased by reallocating every unit to the people who value their last units at $45.
(e) will be increased by reallocating every unit to the people who value their last units at $30.
Explanation / Answer
b) will be increased by reallocating some units from people who value them at $30 to people
who value them at $45
By this, value would be increased and maintain that all units are allocated.
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