Answer the question with graph
Consider an economy which can produce two commodities with quantities x1 and x2. It is possible to produce (x1, x2) = (3,0). It is also possible to produce (x1, x2) = (0,2). It is also possible to produce all convex combinations of these two allocations.
Construct the set of feasible production possibilities graphically.
There are only two individuals, 1 and 2. Utilities are as follows: u1 = 2×1 + 2. = 3×2 + 1.
Construct the set of feasible utility allocations for the two individuals.
Is the information given so far sufficient to find the Nash bargaining solution?