Re: can someone please post solutions to pareto optimal questions of dse 2014?

Posted by onionknight on May 31, 2015; 12:54pm
URL: http://discussion-forum.276.s1.nabble.com/can-someone-please-post-solutions-to-pareto-optimal-questions-of-dse-2014-tp7597203p7597270.html

ua= xa(1+ya-yb)= xa(1+ya-1+ya)=2*xa*ya when ya>yb
       xa(1+0)=xa     otherwise
Similarly you can write the function for ub. Now draw an edgeworth box and draw indifference curves for both consumers that pass through the 4 given points. The indifference curves would be vertical lines in the bottom half(below ya=yb=1/2) for each consumer and cobb douglas type in the upper half. There'd be a change in shape of the indifference curves at the line (ya=yb=1/2). For part d, you'll find there is no allocation that makes both consumers better off than the endowment (Both consumers can't together be shifted to higher indifference curves than the ones they are at presently).