DSE 2012 Qn:27
Whats the answer for this one? Its given the answer is c. But I'm getting d.
At pareto optimal choice, slope of both utility curves are same.
MRS(A)=MRS(B)
MRS(A)=1
MRS(B)=MUx/MUy= x/y
=> B should consume x and y in equal ratio, which is Allocation 2.
How is the answer c?