L2.7 - Pareto Efficiency : Example (Lexicographic Preference , Substitutes)

[@anjalibesoya9609]

Sir, what will be the set of pareto efficient points if one lexicographically prefers x to y and another y to x?

[@econ.school]

I think you can do it if you try (after watching the above video). It is easy. You can post your question on the forum if you want to discuss with other students: www.econschool.in/resources/forum

[@stefaniseminario5351]

Hi, so, How can I prove that is pareto efficient?

[@econ.school]

I am not sure if I have understood your question. For the problem that is discussed in the video, I have already provided the proof of the set of Pareto efficient allocations.

[@barbarachristina5608]

May you provide one example about cobb douglas?

[@rhea_khurana]

Barbara Christina For 2 cobb douglas goods, the PE allocations are the ones at the tangency of any two ICs. So, the set of PE allocations is given by the equation: Slope of IC1 = Slope of IC2