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There are two individuals, A and B, who consume two goods, 1 and 2. Suppose that at a point on the production possibility frontier for
There are two individuals, A and B, who consume two goods, 1 and 2. Suppose that at a point on the production possibility frontier for the two goods, 1 and 2, the slope is 3. Suppose, also, that at the implied competitive equilibrium, the slopes of the indifference curves of the two individuals are both equal to 8. Is this outcome Pareto efficient? Expain. If not, can you suggest a Pareto improvemtn?
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