Given U1 = f(x1, y1) and U2 = max{g(x2, y2)}, where g(0, 0) and h(10, 10), which of the following is NOT pareto efficient?
Understand the Problem
The question seems to be asking about a comparison or evaluation of certain points related to efficiency, given specific conditions or definitions involving U1 and U2. The goal is to identify which of the listed options does not describe a 'pareto efficient' scenario.
Answer
Ind 2 consuming (5, 5) is NOT Pareto efficient.
Ind 2 consuming (5, 5) is NOT Pareto efficient.
Answer for screen readers
Ind 2 consuming (5, 5) is NOT Pareto efficient.
More Information
Pareto efficiency occurs when resources are allocated in a way that any attempt to reallocate will make at least one individual worse off. Here, all options except 'Ind 2 consuming (5, 5)' likely display this property under the given utility functions and endowments.
Tips
A common mistake is assuming symmetry implies Pareto efficiency without analyzing the potential for utility improvements.
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