Re: DSE 2010 Disucssion-Please joim

Posted by Granpa Simpson on May 24, 2014; 8:27am
URL: http://discussion-forum.276.s1.nabble.com/DSE-2010-Disucssion-Please-joim-tp7590469p7590532.html

For Q54)
Option A: Cannot be Pareto Efficient because A is worse off as compared to the initial endowment bundle, since A strictly prefers bundle with more of y (lexicographicaly prefers y to x) so putting him/her to (1,0) makes her worse off as compared to (0,1). So a cannot be the answer.
Option B: Consider reallocation (1,1) for A and (1,0) for B..clearly A can be made better off as compared to the bundle (0,1) keeping B's utility constant at 0.
Option D: Cannot be the answer by the logic used for option b.
Option C: is the right answer.