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

Posted by L on Jun 01, 2015; 11:26am
URL: http://discussion-forum.276.s1.nabble.com/can-someone-please-post-solutions-to-pareto-optimal-questions-of-dse-2014-tp7597203p7597295.html

@Onionknight

For Q.57, I didn't understand how the indifference curve will be discontinuous at xa = ya or xa = yb. Also, I think the dividing line should be ya = yb = 1/2 as the indifference curves change when ya > yb.

And although, the highest overall utility is for part (d) {(Ua, Ub) : (1/4, 3/2)}, but for part c and b {(Ua, Ub) : (1/2, 3/4)} A's utility is higher as compared to d while B's utility is lower. So, if going from allocation c (or b) to d, overall utility is increasing at the expense of A. Isn't this pareto improvement is coming at the expense of A. Infact, why should it be called pareto improvement?
So, isn't b, c,d all are pareto optimal?