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How is the Edgewroth Box diagram for exchange constructed?
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- What is the concepts of edgeworth box diagram, advantage zone, and contract curve.Explain the simultaneous general equilibrium of production and exchange. Will it be possible to attain such equilibrium? When the product market is characterized by monopoly and the factor market by monopoly.Consider the barter exchange model owith 5 agents (A, B, C, D, and E) and 5 goods (a, b, c, d, and e), where agent A initially owns good a, agent B initially owns good b, agent C initially owns good c, agent D initially owns good d, and agent E initially owns good e. The preferences of the agents are given below. Find the allocation that is obtained by using the top trading cycles (TTC) procedure. Show your work in how you obtained your answer. Agent A: b> c> d > e>a Agent B: d > c> e> a > b Agent C: e > a > b> d>c Agent D: 6 > a > c> e>d Agent E: d > b > c> a > e
- When we analyze the general equilibrium model, why do we ignore the equilibrium for the non-monetary market?“Because all points on a contract curve are efficient, they are all equally desirable from a social point of view.” Do you agree with this statement? Discuss.Why do we use general equilibrium analysis rather than partial equilibrium analysis to study comparative advantage? Explain
- Why is the production possibility frontier concave? Be sure to explain economic intuition behind that fact.Graphically demonstrate how the following economic events influence (ceteris paribus) the relevantsupplyfunction. Label your axes, and specify the market you are discussing. (a) Strong profits in the market for cyber security attract new firms. (b) Low-cost energy reduces the expense of producing and storing ice creamWhat distinguishes comparative advantage from absolute advantage in production?