Past ISI questions

[kanv93]

Here is the solution

[onionknight]

Pareto Optimality is achieved at points where you cannot make someone better off without making someone else worse off.

Suppose the library is located that a point A. First consider that A lies between 0 and 0.3, in this case if you move to any point to the right of A then the utilities of all 3 consumers would increase, so any point between 0 and 0.3 is not optimal. For the same reason, points between 0.6 and 1 aren't Pareto optimal either.

Next consider A between 0.3 and 0.4. If you move to the right or left of A, then the utility of at least one of the consumers is going to decrease while those of the others would increase. These points are thus pareto optimal. For the same reason, all points between 0.4 and 0.6 and the points 0.3, 0.4 and 0.6 are also pareto optimal.

[onionknight]

Points where total utility is not maximized can also be Pareto Optimal. Your solution is incorrect.

[Rajat]

Thanks onionknight and kanv !

@Onionknight, agreed that pareto efficiency means one cannot be made better off without making someone else worse off and as per your reasoning, there are multiple points where we find this condition to be valid ?

But, from the point of view of the examiner, dont you think he could be asking for the point at which not only is the condition valid (better off/worse off condition) but also where utility is maximized. And this, he is referring to as Pareto optimal location.
Thats what i feel. (to put it another way, its the same difference as the difference between trivial and non-trivial solutions to an equation)

[onionknight]

Yes there are multiple pareto optimal locations. The question doesn't ask you to find a Pareto Optimal Location for the given case, it only asks you to define a Pareto Optimal Location. Even if it did ask you to just find a Pareto Optimal Location for the given case, I don't think that'd be the correct way to go about it.  

[Rajat]

Question 4 from ISI 2014 sample paper. how to solve part c ?

[kk]

how to solve question number 2 of ISI PEB

[deepti]

plz hlp me with question no.2 & 3 in isi 2015 paper