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What is the concepts of edgeworth box diagram, advantage zone, and contract curve.
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- How is the Edgewroth Box diagram for exchange constructed?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.Explain the theory of comparative advantage using an example, and describe five (5) assumptions.
- “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.on the basis of criticizing the views of the Mercantilism, Adam Smith put forward ( ) theory. A .Absolute Advantage Theory B.Comparative AdvantageTheory c.Overlapping Demand Theory D.Factor Endowments TheoryWhat does the contract curve in an Edgeworth production box signify? Why do competitive markets generate equilibriums that lie on the contract curve?
- “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? Please explain why10. Which one the following represents a theory for the long-term?a. Theory of factor endowmentsb. A theory of comparative advantagec. A theory based on the product cycled. An overlapping demand theoryWhat is the difference of absolute advantage and comparitive advantage?