Lakshmi and Sam have a cake that they want to divide in an efficient way, and the cake is the only good in their little economy. Both Lakshmi and Sam like cake and would always prefer to have more of...

Lakshmi and Sam have a cake that they want to divide in an

efficient way, and the cake is the only good in their little economy. Both Lakshmi and Sam like cake and would always prefer to have more of it. Using the standard of efficiency in

consumption, determine whether the following ways of dividing the cake are efficient.

a. Lakshmi and Sam each get half of the cake.

b. Lakshmi and Sam each get one-third of the cake and onethird is thrown away.

c. Lakshmi gets the whole cake and Sam gets nothing.