Consider a two-period resource allocation model where the efficient allocation implies undiscounted total surplus of $175 and $100 n the first and second periods, respectively. Assume the rate of return on investment is 50 percent. The smallest possible ntergeneration transfer that will make the efficient resource allocation sustainable is: Select one: O a. $25. O b. $32.50. O c. $37.50. O d. $30.

Consider a two-period resource allocation model where the efficient allocation implies undiscounted total surplus of $175 and $100 n the first and second periods, respectively. Assume the rate of return on investment is 50 percent. The smallest possible ntergeneration transfer that will make the efficient resource allocation sustainable is: Select one: O a. $25. O b. $32.50. O c. $37.50. O d. $30.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.9P

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