Below is an Edgeworth box of two individuals, Ross and Rosa, in the consumption of two goods, X and Y. Rosa Contract Curve IRos Ress 1. Consider allocations b-f (meaning points a, b, and f). Which allocations(s) A. are better for Ross than “a" (ignoring Rosa)? B. are better for Rosa than "a" (ignoring Ross)? C. are worse for both Ross and Rosa than "a"? D. are better for both Ross and Rosa than “a"? E. are Pareto superior to "a"? 2. Suppose that the initial allocation is point a between Ross and Rosa. A. Discuss how Ross's condition be made better off without harming Rosa (i.e., Rosa maintains her level of utility). B. Illustrate this in a separate diagram and label point/s as necessary (also, if other point/s will have to be made or incorporated). 3. Consider once again that the initial allocation is point a. A. Discuss (very briefly) how point d is reached as a Pareto efficient allocation between Ross and Rosa. B. illustrate this condition in a separate diagram.

Below is an Edgeworth box of two individuals, Ross and Rosa, in the consumption of two goods, X and Y. Rosa Contract Curve IRos Ress 1. Consider allocations b-f (meaning points a, b, and f). Which allocations(s) A. are better for Ross than “a" (ignoring Rosa)? B. are better for Rosa than "a" (ignoring Ross)? C. are worse for both Ross and Rosa than "a"? D. are better for both Ross and Rosa than “a"? E. are Pareto superior to "a"? 2. Suppose that the initial allocation is point a between Ross and Rosa. A. Discuss how Ross's condition be made better off without harming Rosa (i.e., Rosa maintains her level of utility). B. Illustrate this in a separate diagram and label point/s as necessary (also, if other point/s will have to be made or incorporated). 3. Consider once again that the initial allocation is point a. A. Discuss (very briefly) how point d is reached as a Pareto efficient allocation between Ross and Rosa. B. illustrate this condition in a separate diagram.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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