Suppose the Economics Department has a graduation party for its students but as a final test they must show they have learned something about trade. Students in group A are given food (F) when they walk in, and students in group B are given a drink (D). Refer to Scenario 1. Suppose that all members of both groups have identical preferences where food and drink provide utility U = FαDβ. The contract curve in the Edgeworth box using a student from each group would be (a) a right angle connecting the lower left corner with the upper right corner. (b) a curve (not necessarily a line) connecting the lower left corner with the upper right corner. (c) a line connecting the lower left corner with the upper right corner. (d) a right angle connecting the upper left corner with the lower right corner.
Suppose the Economics Department has a graduation party for its students but as a final test they must show they have learned something about trade. Students in group A are given food (F) when they walk in, and students in group B are given a drink (D).
-
Refer to Scenario 1. Suppose that all members of both groups have identical preferences where food and drink provide utility U = FαDβ. The contract curve in the Edgeworth box using a student from each group would be
(a) a right angle connecting the lower left corner with the upper right corner.
(b) a curve (not necessarily a line) connecting the lower left corner with the upper right corner.(c) a line connecting the lower left corner with the upper right corner.
(d) a right angle connecting the upper left corner with the lower right corner.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
