Essay

Constructing the Set of Efficient Allocations

Consider an economic model with two individuals. One individual is a producer who chooses between free time and consuming a good they produce. The total amount of the good available is determined by the amount of time they work. The second individual is a non-producer who receives a share of the good. Describe the complete graphical method for identifying and plotting the entire set of allocations where it is impossible to make one person better off without making the other worse off. Your explanation should clarify what variables are on the axes and how each specific point on the resulting curve is found.

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Updated 2025-08-02

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