Explain why an economy in which airlines charge different passengers different prices for the same flight will not have exchange efficiency. b. Going back to our two good (Apples, Oranges), two-person (Ed, Mary) economy, suppose that at a given allocation, Ed's MRSAO is 3 and Mary's MRSAO is 1. Use proof by contradiction to show that this allocation is not exchanged efficiently. Identify a trade that will increase the utility of Ed and Mary. Explain. Show this graphically (with indifference curves).
Going back to our two good (Apples, Oranges), two-person (Ed, Mary) economy, suppose that at a given allocation, Ed's MRSAO is 3 and Mary's MRSAO is 1. Use proof by contradiction to show that this allocation is not exchanged efficiently. Identify a trade that will increase the utility of Ed and Mary. Explain. Show this graphically (with indifference curves).
Explain why an economy in which airlines charge different passengers different prices for the same flight will not have exchange efficiency. b. Going back to our two good (Apples, Oranges), two-person (Ed, Mary) economy, suppose that at a given allocation, Ed's MRSAO is 3 and Mary's MRSAO is 1. Use proof by contradiction to show that this allocation is not exchanged efficiently. Identify a trade that will increase the utility of Ed and Mary. Explain. Show this graphically (with indifference curves).
Going back to our two good (Apples, Oranges), two-person (Ed, Mary) economy, suppose that at a given allocation, Ed's MRSAO is 3 and Mary's MRSAO is 1. Use proof by contradiction to show that this allocation is not exchanged efficiently. Identify a trade that will increase the utility of Ed and Mary. Explain. Show this graphically (with indifference curves).