Answer the following questions with a brief explanation (a couple of sentences is fine).

(a) Consider our two-person, two-good general equilibrium model with production.Explain why an allocation of resources with MRSA = MRSB > MRT would notbe efficient.

(b) Economists usually view utility as an ordinal concept (ie. we can't make interpersonalcomparisons of utility, and the utility numbers themselves are just "ranks"- not a measure of happiness). Can this viewpoint be maintained if we want totake social welfare functions seriously?

(c) If a good that costs $1 to produce is sold for $2, what is lost and who loses?