<p>An allocation is <em>feasible</em> if the aggregate consumption can be covered by production and the endowments.</p>

CC BY-SA 4.0
2021-09-02T05:34:17.840Z
2021-09-02T05:34:17.840Z
Giskard
<p>This is pretty self explanatory, you cannot consume more than you produced or you been given as an endowment.</p>
<p>Hence the allocation is resource feasible if:</p>
<p><span class="math-container">$$\sum x = \sum y + \sum \omega $$</span></p>
<p>For example, this would not be feasible:</p>
<p><span class="math-container">$$\sum x &gt; \sum y + \sum \omega $$</span></p>
<p>Consumption cannot outstrip production plus the initial endowment.</p>
<p>Next this condition on resource allocation would also be feasible</p>
<p><span class="math-container">$$\sum x \leq \sum y + \sum \omega $$</span></p>
<p>But usually the less or equal is replaced by equality, as optimizing agents would use up all their resources, not wasting anything.</p>

CC BY-SA 4.0
2021-09-02T05:37:28.377Z
$\leq$ also assumes free disposal.
Giskard
CC BY-SA 4.0
2021-09-02T05:44:03.900Z
@Giskard yes that’s typically left unstated but thanks for pointing that out
1muflon1
CC BY-SA 4.0
2021-09-02T05:34:32.663Z
2021-09-02T05:34:32.663Z
1muflon1
<p><a href="https://i.sstatic.net/iEoY4.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/iEoY4.png" alt="Definition" /></a></p>
<p>What is this saying intuitively? I can't seem to wrap my head around the interpretation of this definition. I do see how if we incorporate price, I can get to the problems solved individually by the household and firm but not quite getting this concept of resource feasibility.<br />
Note: <br />
<span class="math-container">$X_i$</span> and <span class="math-container">$Y_j$</span> are the consumptions and production bundles respectively, and <span class="math-container">$w_i$</span> is the endowment bundle, <span class="math-container">$i$</span> is for an household, and <span class="math-container">$j$</span> represents a firm.</p>

<microeconomics>
Resource Feasibility Definition
Rumi
# Resource Feasibility Definition

(Asked by: username_0 on 2021-09-02)

[![Definition](https://i.sstatic.net/iEoY4.png)](https://i.sstatic.net/iEoY4.png)

What is this saying intuitively? I can't seem to wrap my head around the interpretation of this definition. I do see how if we incorporate price, I can get to the problems solved individually by the household and firm but not quite getting this concept of resource feasibility.  
Note:   
$X\_i$ and $Y\_j$ are the consumptions and production bundles respectively, and $w\_i$ is the endowment bundle, $i$ is for an household, and $j$ represents a firm.

**Tags:** microeconomics


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## 2 answers

### Answer by username_2 on 2021-09-02. Score: 3 | Accepted answer

This is pretty self explanatory, you cannot consume more than you produced or you been given as an endowment.

Hence the allocation is resource feasible if:

$$\sum x = \sum y + \sum \omega $$

For example, this would not be feasible:

$$\sum x > \sum y + \sum \omega $$

Consumption cannot outstrip production plus the initial endowment.

Next this condition on resource allocation would also be feasible

$$\sum x \leq \sum y + \sum \omega $$

But usually the less or equal is replaced by equality, as optimizing agents would use up all their resources, not wasting anything.

> **Comments:**
> **username_1**: $\leq$ also assumes free disposal.  
> **username_2**: @username_1 yes that’s typically left unstated but thanks for pointing that out  

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### Answer by username_1 on 2021-09-02. Score: 2

An allocation is *feasible* if the aggregate consumption can be covered by production and the endowments.


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