Case Study

Efficiency Curve with Asymmetric Preferences

Consider an exchange economy with two individuals, Alex and Ben, and a total of 10 units of Apples and 10 units of Bananas. Alex's satisfaction depends only on the number of Apples they consume; the quantity of Bananas has no effect on their well-being. Ben's satisfaction increases with the consumption of both Apples and Bananas. An allocation is considered efficient if it is impossible to make one person more satisfied without making the other less satisfied. Based on this scenario, describe the complete set of Pareto-efficient allocations.

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Updated 2025-08-02

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