Pareto Efficiency Examples

For each of the following allocations, the first row gives the total set of food and shelter produced by the economy, and the next two rows say how the food and shelter is allocated to Alice and Bob. For the moment, we are assuming they are the only two people in the economy.

Are these allocations pareto efficient? Try to decide before watching the following video that walks through the answer.

Did you feel like any of the videos above were confusing, or could use more detail? If you're a student at Iowa State University, send me a quick note at mclancy@iastate.edu, referencing the video number and your issue, if applicable.