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Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki?
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Assume an economy has two individuals Joti and Mpoki and only one good...
Policy Advice to Address Unfair Allocation of Food
1. First Welfare Theorem
According to the First Welfare Theorem, competitive markets will always lead to a Pareto efficient allocation of resources. In this case, the allocation of food between Joti and Mpoki is Pareto efficient as the market operations were competitive.
2. Second Welfare Theorem
The Second Welfare Theorem states that any Pareto efficient allocation can be achieved through redistribution of initial endowments and lump-sum transfers. In this case, the initial allocation of food disproportionately favors Joti over Mpoki.
Policy Advice:
1. Redistribution of Initial Endowments
The government could consider redistributing initial endowments of food between Joti and Mpoki to make the allocation more equitable. This could involve taking some units of food from Joti and giving them to Mpoki to ensure a fair distribution.
2. Lump-sum Transfers
Another policy option could be to implement lump-sum transfers from Joti to Mpoki to compensate for the uneven distribution of food. This would involve transferring units of food from Joti to Mpoki without affecting the overall allocation in the economy.
By implementing these policy measures, the government can address the unfair allocation of food between Joti and Mpoki while still maintaining Pareto efficiency in the economy.
1. First Welfare Theorem
According to the First Welfare Theorem, competitive markets will always lead to a Pareto efficient allocation of resources. In this case, the allocation of food between Joti and Mpoki is Pareto efficient as the market operations were competitive.
2. Second Welfare Theorem
The Second Welfare Theorem states that any Pareto efficient allocation can be achieved through redistribution of initial endowments and lump-sum transfers. In this case, the initial allocation of food disproportionately favors Joti over Mpoki.
Policy Advice:
1. Redistribution of Initial Endowments
The government could consider redistributing initial endowments of food between Joti and Mpoki to make the allocation more equitable. This could involve taking some units of food from Joti and giving them to Mpoki to ensure a fair distribution.
2. Lump-sum Transfers
Another policy option could be to implement lump-sum transfers from Joti to Mpoki to compensate for the uneven distribution of food. This would involve transferring units of food from Joti to Mpoki without affecting the overall allocation in the economy.
By implementing these policy measures, the government can address the unfair allocation of food between Joti and Mpoki while still maintaining Pareto efficiency in the economy.
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Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki?
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Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki? for Class 10 2024 is part of Class 10 preparation. The Question and answers have been prepared according to the Class 10 exam syllabus. Information about Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki? covers all topics & solutions for Class 10 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki?.
Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki? for Class 10 2024 is part of Class 10 preparation. The Question and answers have been prepared according to the Class 10 exam syllabus. Information about Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki? covers all topics & solutions for Class 10 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki?.
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Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki?, a detailed solution for Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki? has been provided alongside types of Assume an economy has two individuals Joti and Mpoki and only one good (food) and the more an individual get the better. Assume that the market operations are competitive and always end up in pareto efficient allocation of the only good in the economy (food). After trading Joti end with 15 units of food where Mpoki end up getting only 1 unit of good. Based on the first and second welfare theorems discuss the policy advice will you offer to the government in order to address the pareto efficient of food that is unfair between Joti and Mpoki? theory, EduRev gives you an
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