Explore BrainMass

Explore BrainMass

    Edgeworth Box

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    How to plot initial endowment points on a edgeworth box graph?

    © BrainMass Inc. brainmass.com March 4, 2021, 5:36 pm ad1c9bdddf


    Solution Preview

    Obiously, e1A+e1B = 4, e2A+e2B = 6
    It's easy to draw an Edgeworth Box like figure1.
    From UA=2X1 + X2, we can say that A's indifference curve are parallel lines with a slope of 1/2. (like line A) refer to figure 2
    In the same way, from UB = X1 + 2X2, B's indifference curve ...

    Solution Summary

    The solution explains the concept of Edgeworth box pretty well and also draws out a couple of graphs (in the attachment). The explanation provided in the response is concise and clear, yet easy to understand. This is a complex topic to understand but the response does a superb job of explaining this difficult concept. Overall, an excellent response.