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Microeconomics II
book

Microeconomics II

by D.N. Dwivedi
August 2011
Intermediate to advanced content levelIntermediate to advanced
368 pages
14h 51m
English
Pearson India
Content preview from Microeconomics II
Welfare Economics: Pareto Optimality 289
inverted and superimposed on the isoquant map of X. e curve joining the two points of origin, O
X
and
O
Y
, is obtained by connecting tangential points of isoquants for X and Y. is curve is called production
contract curve. It is the locus of tangential points of the isoquants of the two rms F
1
and F
2
both produc-
ing goods X and Y. At each point of tangency, the MRTS for both the goods are the same, that is,
MRTS MRTS
L K
X
L K
Y
, ,
=
erefore, only those points that lie on the production contract curve (O
X
O
Y
) represent the Pareto
optimality in production or Pareto ecient production. Any other
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Publisher Resources

ISBN: 9788131797655