Peter and John have two apples and two oranges to share. The value (utility) of consuming a fruit depends on whether they already have a fruit of the same kind or not, but is independent of the consumption of the other kind of fruit. Their marginal utilities for each fruit are given in the table below. For example, if Peter consumes two apples and John two oranges, then the value of their consumption is 10 + 6 = 16 for Peter and 4 + 3 = 7 for John. Based on this information, select the following allocation that is Pareto efficient.
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Question

Peter and John have two apples and two oranges to share. The value (utility) of consuming a fruit depends on whether they already have a fruit of the same kind or not, but is independent of the consumption of the other kind of fruit. Their marginal utilities for each fruit are given in the table below. For example, if Peter consumes two apples and John two oranges, then the value of their consumption is 10 + 6 = 16 for Peter and 4 + 3 = 7 for John. Based on this information, select the following allocation that is Pareto efficient.

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Accepted Answer

Peter has one apple and two oranges and John has one apple.

Answer

Peter has two apples and John has two oranges.

Answer

Peter has two oranges and John has two apples.

Answer

Peter has one orange and John has one orange and two apples.

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Peter and John have two apples and two oranges to share. The value (utility) of ...

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