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3. Adam and Eve consume only apples. Of the following allocations of apples, which are preferred to which others according to (a) the Pareto criterion, and b) the efficiency criterion? a. Adam has 12 apples and Eve has 0 apples. b. Adam has 9 apples and Eve has 3 apples. c. Adam has 6 apples and Eve has 6 apples. d. Adam has 0 apples and Eve has 12 apples. e. Adam has 5 apples and Eve has 5 apples.
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Answer #1

Pareto criterion says that it is a condition ans situation where anybody is better off without getting other worse off. So according to this principle the option b ,c ,e are pareto efficient but in another points one is worse off as getting zero apple so in that case pareto condition soes not apply.

For efficent condition it should be necessary that MRSa = MRSb so in that case the apple to adam must be equal to eve so it is shown in points c and e.

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