by comp iven an appropriate endowment. Do so by identifying an initial endowment point, b, located somewhere other an at point a, such that the competitive equilibrium (resulting from competitive exchange) is bundle a. xplain. OpQ consider the Edgeworth Box illustrated in the figure to the right. I is one of Jane's indifference curves and Px is one of Denise's indifference curves. The price of good X and good Y is represented by - Py sing the point drawing tool, indicate an endowment located anywhere other than at point a such that the ompetitive equilibrium is bundle a. Label this endowment 'b." arefully follow the instructions above, and only draw the required object. undle b is an endowment such that the competitive equilibrium is bundle a because Good X OA. bundle bis a Pareto-efficient point. OB. the slope of the price line equals the slope of the indifference curves at bundle b. O C. bundle a can be obtained from bundle b with trade O D. both consumers have the same marginal rate of substitution at bundle b. A poo9

by comp iven an appropriate endowment. Do so by identifying an initial endowment point, b, located somewhere other an at point a, such that the competitive equilibrium (resulting from competitive exchange) is bundle a. xplain. OpQ consider the Edgeworth Box illustrated in the figure to the right. I is one of Jane's indifference curves and Px is one of Denise's indifference curves. The price of good X and good Y is represented by - Py sing the point drawing tool, indicate an endowment located anywhere other than at point a such that the ompetitive equilibrium is bundle a. Label this endowment 'b." arefully follow the instructions above, and only draw the required object. undle b is an endowment such that the competitive equilibrium is bundle a because Good X OA. bundle bis a Pareto-efficient point. OB. the slope of the price line equals the slope of the indifference curves at bundle b. O C. bundle a can be obtained from bundle b with trade O D. both consumers have the same marginal rate of substitution at bundle b. A poo9

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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