Assume a simple island economy with two consumers and one good, widgets. There are 100 widgets for purposes of allocation between the two consumers- There is no production technology on the island (i. e , no one can create more widgets). There is also no disposal technology Cl. e. , no one can destroy widgets) .
a) Graphically show all the feasible allocations and the subset that are Pareto optimal. Be sure to carefully label what is feasible and what is Pareto optimal on your graph.
