Question: imagine that two consumers a and b have identical utility...
Imagine that two consumers, A and B, have identical utility functions equal to U=x^(1/4)y^(3/4). Person A has j units of x and k units of y. Person B has m units of x and n units of y. The variables j,k,m,n will be chosen from the set of any positive whole numbers.
Part a) Show that this allocation of x and y is inefficient.
Part b) Propose a trade that would be a Pareto improvement.