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Evaluating Outcomes in a Shared Project
Two students, Alex and Ben, are working on a project. Their final grade depends on the effort each puts in. They can either 'Work Hard' or 'Slack Off'. The possible outcomes, represented as (Alex's Grade, Ben's Grade), are as follows:
- Outcome A: If both Work Hard -> (90, 90)
- Outcome B: If Alex Works Hard and Ben Slacks Off -> (80, 95)
- Outcome C: If Alex Slacks Off and Ben Works Hard -> (95, 80)
- Outcome D: If both Slack Off -> (70, 70)
Analyze these four outcomes. Identify which of the outcomes are Pareto efficient and explain why. Also, explain why any remaining outcome is not efficient.
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Economics
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