Re: Re:vasudha isi 2012 ME II

Posted by duck on Mar 11, 2012; 2:13am
URL: http://discussion-forum.276.s1.nabble.com/isi-2012-ME-II-tp7354815p7362140.html

Hi Vasudha.. :)

Suppose 2 goods and 2 agents economy:
Its given in the question:
If Agent 1's consumption: {lamda*w1 , lamba*w2}
Agent 2's consumption: {(1-lamda)*w1 , {1-lamda)*w2 }
Then, is it pareto otpimal?

Yes, because if you move away from this allocation by changing lamda then, one person is better off and other is worse off.

Your example doesnot work here.
You cannot give 1/2 of one good and 1/5 of the other. The proportion needs to be the same.