Edge worth box

Assignment Help Business Economics
Reference no: EM131169558

(Edge worth box) Suppose Jimmy and Rita are in an exchange economy. Their endowments: apples and oranges. Suppose further that both Jimmy and Rita’s utility functions are concave in the two goods. Draw an Edge worth box for this exchange economy and see if the following statement is true or false:

 

If the initial allocation is that one party has all of endowment for one good and the two parties share the endowment of the other good (for example, Rita has all the oranges, and both Jimmy and Rita have some apples), then there is always room for Pareto improvement.

Reference no: EM131169558

Questions Cloud

What is the income elasticity of her coffee demand : Dani’s work has raised her income from $100 a week to $110 a week. Her consumption of coffee has increased from 3 cups a week to 4 cups a week. What is the income elasticity of her coffee demand using the midpoint (arc) elasticity equation? (Type you..
Opportunity costs and the price of skirt into consideration : Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. Assume that Juanita takes opportunity costs and the pri..
Under multilateral economic liberalization regime : Will countries be better off under a multilateral economic liberalization regime or under a system of regional economic integration? Why? How useful is economic geography in explaining the success of regional economic integration blocs? Give examples..
True about business cycles : Which of the following is true about business cycles in the United States?
Edge worth box : (Edge worth box) Suppose Jimmy and Rita are in an exchange economy. Their endowments: apples and oranges. Suppose further that both Jimmy and Rita’s utility functions are concave in the two goods. If the initial allocation is that one party has all o..
Using demand and supply analysis : Using demand and supply analysis, briefly discuss the effect of each of the following on the market for cigarettes:
What uniform annual amount must be invested : A computer costs $1, has an estimated life of 10 yrs and a scrap value of $1500. Assuming no inflation and an interest rate of 4%, what uniform annual amount must be invested at the end of each of the 10 yrs in order to replace the computer?
Consider the development of the trade routes : Consider the development of the trade routes of Afro-Eurasia (Indian Ocean, Silk Road etc). Then consider the development of the Atlantic System and other emerging global systems. What were the changes in systems of thought, economics and technologie..
Reasons for their occurrence and their social consequences : Discuss the factors contributing to movements along different points on the same supply curve, and the factors contributing to the supply curve shifting to the right or to the left of its original position. (Also, identify actual examples). Also, ref..

Reviews

Write a Review

Business Economics Questions & Answers

  Does this lead to misleading comparison between countries

Goods and services sold in black markets, such as illegal0 drugs, are generally not included in GDP. Does this lead to misleading comparison between countries? Should these activities be included as a positive or negative in GDP?

  Demand increases while supply decreases

If demand increases while supply decreases for a particular good,

  Analyze the issue regarding going digital

John is a manager in the Gardening department at ABC Hardware. Last week the general manager was fired for incompetence. The chief executive officer appointed John to be the new general manager. Provide a written analysis of how John should tackle th..

  Elucidate briefly what kind of supply and demand elasticity

congress decides to reduce our dependence on foreign oil by imposing a $.50 tax on each gallon of gasoline at the pump. Elucidate briefly what kind of supply and demand elasticity for gasoline must be present in the U.S. market, in order for this..

  Graphical representation of distrubition of data histogram

Converting data info to understand past and current performance is the core of descriptive analytics and is vital to making good business decisions. In the financial industry describe the details of a specific graphical representation of the distrubi..

  Imposes binding price ceiling on competitive market

When the government imposes a binding price ceiling on a competitive market, a shortage of the good arises, and sellers must ration the scarce goods among the large number of potential buyers.

  Substitute or a complement of the product demanded

Suppose the demand curve for a product is given as Q = 10 – 2P + Po where P is the price of the product, Po is the price of another good, and Q is the quantity demanded. Assume the price of the other good is $2.00. a. Suppose P = $1.00. What is the p..

  Demand and supply of apple iphone and factors

Demand and supply of Apple iPhone and factors that affect the demand and supply sides of the market.

  How disparate are returns if you win

How disparate are returns if you win. As disparity increases => marginal benefit increases. Which of these two explanations is correct.

  Calculate firms profit maximizing price-output combinations

Oak entertainment is the only movie theater in a small town. The firm can screen movies at a constant average and marginal cost of AC = MC = 10. The firm faces a demand curve given by: Q = 85-0.5P. Calculate the firms profit maximizing price and outp..

  Water cooler the demand also cost estimate

Overhead at the water cooler the demand also cost estimate which were provided at the meeting are very useful.

  An individual has an income per month

An individual has an income of $1000 per month with which they buy the composite good with a price of $1 and food with a price of $2/unit of food. Assume instead that the government had given the individual $100 in cash. Draw the new budget constrain..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd