DSE 2010 Q 36

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DSE 2010 Q 36

Unsure M
Consider an economy with two agents, A and B, and two goods x1 and x2. Both agents treat x1 and x2 as perfect complements. Suppose the total endowment of x1 is 4 and the total endowment of x2 is 2. Which of the following allocations is not Pareto optimal?
1) A gets (1,1) and B gets (1,1).
2) A gets (2,1) and B gets (3/2,1)
3) A gets (1/2,3/2) and B gets (3,1/2)
4) A gets (3,2) and B gets (0,0).
The problem looks elementary and I'm stuck. Please hellp :(
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Re: DSE 2010 Q 36

Sumit
Follow this link and read each and every discussion...including amit sir definition of pareto optimalty..
http://discussion-forum.2150183.n2.nabble.com/DSE-2006-q30-tp7581726.html

After this try to solve above question...
M.A Economics
Delhi School of Economics
2013-15
Email Id:sumit.sharmagi@gmail.com
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Re: DSE 2010 Q 36

Prerna Rakheja
Hi,

Both have utilities function of the form min{x1,x2}

Hence answer is c, consider re allocation where A gets (2,1) and B gets (2,1)
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Re: DSE 2010 Q 36

duck
In reply to this post by Unsure M
Hi.. :)
Please find attached all PE points in this case:
PE.png
:)