Select one: a. as a result of the change in endowment, the output of food has increased, while the output of cloth has decreased b. as a result of the change in endowment, the output of food has decreased, while the output of cloth has increased c. as a result of the change in endowment, the output of both goods has increased d. as a result of the change in endowment, the output of both goods has decreased

Select one: a. as a result of the change in endowment, the output of food has increased, while the output of cloth has decreased b. as a result of the change in endowment, the output of food has decreased, while the output of cloth has increased c. as a result of the change in endowment, the output of both goods has increased d. as a result of the change in endowment, the output of both goods has decreased

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Jane has 11 liters of soft drinks and 10 sandwiches. Bob, on the other hand, has 9 liters of soft drinks and 10 sandwiches. With these endowments, Jane's marginal rate of substitution (MRS) of soft drinks for sandwiches is 5 and Bob's MRS is equal to 7. Draw an Edgeworth box diagram to show whether this allocation of resources is efficient. If it is explain why. If it is not, what changes will make both parties better off? 1.) Using the three-point curved line drawing tool, draw an indifference curve for Jane when consuming 11 liters of soft drinks and 10 sandwiches. Label this curve Uj. 2.) Using the three-point curved line drawing tool, draw an indifference curve for Bob when consuming 9 liters of soft drinks and 10 sandwiches. Label this curve Uğ. Carefully follow the instructions above, and only draw the required objects. Sandwiches 0₁ Jane 11 Soft drinks Bob OB 10 Q
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Ma1. Please give only typed answer.
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