Re: General Equilibrium - May 18

Posted by aditi5000 on May 18, 2012; 4:41pm
URL: http://discussion-forum.276.s1.nabble.com/General-Equilibrium-May-18-tp7565438p7565754.html

Sir for pareto efficient outcomes, I am only getting (12,2) for consumer 1 and (0,6) for consumer 2.
I went according to consumer 1's preferences - either the total consumption has to increase from (10+2 = 12) to 12+2 = 14 or the total consumption can stay constant at 12 units but > or = of good 2 needs to be present in the bundle but definitely not < 2.
So his PO outcome must be (12,2) and thus for the other consumer its (0,6). How did m+n=8 situation arise? Maybe I am interpreting the question wrong?

And for competitive equilibrium, yes indeed it doesn't exist because consumer 1's demand would be (0,12)...