Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Question
Chapter 16, Problem 6RQ
To determine
The Edgeworth box diagram.
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a pareto efficient allocation should always be on the contract curve . Discuss this sentence
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“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.
Chapter 16 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
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- Discuss with help of a production possibility curve, how resource allocation decisions are made and how allocation decisions incur an opportunity cost.arrow_forwardConsider a simple economy with two individuals (A and B) and two goods (x and y). Can you draw the Edgeworth Box Diagram and explain the contract curve?arrow_forwardThe first Welfare Theorem states that, invariably, a competitive market results in an efficient allocation of resources and thus maximizes social surplus. True or False?arrow_forward
- Why is the production possibility frontier concave? Be sure to explain economic intuition behind that fact.arrow_forwardWhat is relationships between general competitive equilibrium, pareto efficiency and equity in an economy ?arrow_forwardAre allocations methods more or less efficient than other methods?arrow_forward
- Dear tutor, please solve these True/False Questions. Thank You! Can it be efficient for one trader to consume all units of the goods while the other trader consumes nothing? In other words, does this point lie on the contract curve? A competitive equilibrium is not Pareto efficient if some members of society are unable to afford a necessary good.arrow_forwardThe production possibility frontier for X and Y consists of all the efficient allocations in the Edgeworth box. Explain why this is so. Also explain why inefficient points in the box would be inside the production possibility frontier.arrow_forward
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