Question on Pareto Optimality problem

[knowpraveen]

Hey, I tried solving this question. I found the locus of Pareto Efficient points to be at y2=(alpha) x y1

The given allocations are bundle (4,0) for A and bundle (1,5) for B. Taking into consideration the respective utilities for the bundles, we have Ux=4(alpha) and Uy=5. For this allocation to be a No Envy allocation, it has to be 4(alpha)>=5, which means alpha has to be greater than or equal to 5/4. Is this the right approach to solve this problem? If its not, kindly find the solution, with the steps.