Bartholomew and Agatha are each endowed with 15 units of food and 15 units of clothing. For Bartholomew, the two goods are perfect substitutes, i.e., UB=FB + CB. For Agatha, the two goods are perfect complements, i.e., U^= min{FA,2C^). Do all of the following in just one graph or chart: Draw an Edgeworth box (with the correct dimensions). Note: Assign clothing on the vertical axis (label it "C") and food on the horizontal axis (label it "F"). Assign Agatha's origin at the lower left corner, while Bartholomew's at the upper right. Plot the endowment point and label it "a". Plot Agatha's indifference curve that passes through w. Label the indifference curve "Agatha". Plot Bartholomew's indifference curve that passes through w. Label the indifference curve "Bartholomew". Shade the region or set of all Pareto-improving allocations relative to a. What is its shape? Draw the contract curve and answer this: Is it a straight line or not? [Hint: The contract curve in this case does not need to touch both origin points. Also, ask yourself: "Is the allocation containing (0,0) for Agatha and (30,30) for Bartholomew an efficient one for the economy? Is the allocation containing (30,15) for Agatha and (0, 15) for Bartholomew efficient?] Darken or thicken the line or curve segment on the contract curve that represents the core. Label this line or curve segment "core".
Bartholomew and Agatha are each endowed with 15 units of food and 15 units of clothing. For Bartholomew, the two goods are perfect substitutes, i.e., UB=FB + CB. For Agatha, the two goods are perfect complements, i.e., U^= min{FA,2C^). Do all of the following in just one graph or chart: Draw an Edgeworth box (with the correct dimensions). Note: Assign clothing on the vertical axis (label it "C") and food on the horizontal axis (label it "F"). Assign Agatha's origin at the lower left corner, while Bartholomew's at the upper right. Plot the endowment point and label it "a". Plot Agatha's indifference curve that passes through w. Label the indifference curve "Agatha". Plot Bartholomew's indifference curve that passes through w. Label the indifference curve "Bartholomew". Shade the region or set of all Pareto-improving allocations relative to a. What is its shape? Draw the contract curve and answer this: Is it a straight line or not? [Hint: The contract curve in this case does not need to touch both origin points. Also, ask yourself: "Is the allocation containing (0,0) for Agatha and (30,30) for Bartholomew an efficient one for the economy? Is the allocation containing (30,15) for Agatha and (0, 15) for Bartholomew efficient?] Darken or thicken the line or curve segment on the contract curve that represents the core. Label this line or curve segment "core".
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Bartholomew and Agatha are each endowed with 15 units of food and 15 units of
clothing. For Bartholomew, the two goods are perfect substitutes, i.e., UB = FB + CB. For Agatha,
the two goods are perfect complements, i.e., UA= min{FA, 2CA).
Do all of the following in just one graph or chart:
Draw an Edgeworth box (with the correct dimensions). Note: Assign clothing on the vertical
axis (label it "C") and food on the horizontal axis (label it "F"). Assign Agatha's origin at the
lower left corner, while Bartholomew's at the upper right.
Plot the endowment point and label it "@". Plot Agatha's indifference curve that passes through
w. Label the indifference curve "Agatha". Plot Bartholomew's indifference curve that passes
through w. Label the indifference curve "Bartholomew".
Shade the region or set of all Pareto-improving allocations relative to w. What is its shape?
Draw the contract curve and answer this: Is it a straight line or not?
[Hint: The contract curve in this case does not need to touch both origin points. Also, ask
yourself: "Is the allocation containing (0,0) for Agatha and (30,30) for Bartholomew an efficient
one for the economy? Is the allocation containing (30,15) for Agatha and (0, 15) for Bartholomew
efficient?]
Darken or thicken the line or curve segment on the contract curve that represents the core. Label
this line or curve segment "core".](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0ed9542f-d658-47ef-8561-8166da0af35e%2F6db02894-2642-4ff3-b83f-0888c64cd3c9%2F5cybxk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Bartholomew and Agatha are each endowed with 15 units of food and 15 units of
clothing. For Bartholomew, the two goods are perfect substitutes, i.e., UB = FB + CB. For Agatha,
the two goods are perfect complements, i.e., UA= min{FA, 2CA).
Do all of the following in just one graph or chart:
Draw an Edgeworth box (with the correct dimensions). Note: Assign clothing on the vertical
axis (label it "C") and food on the horizontal axis (label it "F"). Assign Agatha's origin at the
lower left corner, while Bartholomew's at the upper right.
Plot the endowment point and label it "@". Plot Agatha's indifference curve that passes through
w. Label the indifference curve "Agatha". Plot Bartholomew's indifference curve that passes
through w. Label the indifference curve "Bartholomew".
Shade the region or set of all Pareto-improving allocations relative to w. What is its shape?
Draw the contract curve and answer this: Is it a straight line or not?
[Hint: The contract curve in this case does not need to touch both origin points. Also, ask
yourself: "Is the allocation containing (0,0) for Agatha and (30,30) for Bartholomew an efficient
one for the economy? Is the allocation containing (30,15) for Agatha and (0, 15) for Bartholomew
efficient?]
Darken or thicken the line or curve segment on the contract curve that represents the core. Label
this line or curve segment "core".
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