Discussion Problem_(22)

[duck]

There are two consumers and two goods (x and y) in the economy. Their utility functions are as follows:
U1 = x1    ; Endownment = (10,0)
U2 = y2    ; Endownment = (0,10)
Find Pareto Efficient Points.

[MI]

Pareto efficient points for given utility functions and endowments are

x1 = 10 , y2 = 10


In general,

in the edgeworth box there will be only one pareto optimal point that will be given by x1 = w1 and y2= w2

w1 and w2 are total endowments of goods 1 and 2 respectively.

[Mauli]

yes i agree with MI
the pareto efficiency points shoould be the endowment points.  

[Sumit]

Pareto optimal point will be initial endowment...i.e x1=10 n y2=10...

[duck]

Hi Guys. :)

Well done!
You all have correctly pointed out PE points. But, never write it like this.
Write in a proper way:
Set of PE allocations: {(x1,y1);(x2,y2) | x1=10, y2=10 ,x1+x2=10 and y1+y2=10}