she would have lower utility—she would be below her reservation indifference curve. But she can achieve her reservation utility by working for 8 hours, so she will accept the contract.
The reason, you explain to Bruno, is that however hard she works along the survival constraint, she barely survives; and the more she works the less free time she has, so the unhappier she is. Along the reservation indifference curve, by contrast, she is just as well off as at her reservation option, meaning that being able to keep more of the grain that she produces compensates exactly for her lost free time.
swapped the positions
a veil of ignorance
not knowing the position that we would occupy in the society we are considering.
To the right of 13 hours of free time (that is, if Angela works less than 11 hours) the biological survival constraint is flatter than the feasible frontier (MRS < MRT). This means that working more hours (moving to the left) would produce more grain than what Angela needs for the extra work.
, if MRT > MRS, Angela could transform an hour of her time into more grain than she would need to get the same utility as before, so the extra grain could make both of them better off.
er reservation option is now the legislated allocation at point F.
the powerful party will capture the entire surplus
power to influence the outcome through legislation and other political means, and the result may be a fairer distribution in their eyes or ours, but may not necessarily be Pareto efficient
enforce alternative allocations, then it may be possible to avoid the trade-off and achieve both efficiency and fairness
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