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 3E
To determine
The Edgeworth box diagram.
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Jane has 11 liters of soft drinks and 10 sandwiches. Bob, on the other hand, has 9 liters of soft drinks and 10 sandwiches. With these endowments, Jane's marginal rate of substitution (MRS) of soft drinks for sandwiches is 6 and Bob's MRS is equal to 8.
Draw an Edgeworth box diagram to show whether this allocation of resources is efficient. If it is explain why. If it is not, what changes will make both parties better off?
Part 2
1.) Using the three-point curved line drawing tool, draw an indifference curve for Jane when consuming 11 liters of soft drinks and 10 sandwiches. Label this curve UJ.
2.) Using the three-point curved line drawing tool, draw an indifference curve for Bob when consuming 9 liters of soft drinks and 10 sandwiches. Label this curve UB.
Jane has 11 liters of soft drinks and 10 sandwiches. Bob, on the other hand, has 9 liters of soft
drinks and 10 sandwiches. With these endowments, Jane's marginal rate of substitution (MRS) of
soft drinks for sandwiches is 5 and Bob's MRS is equal to 7. Draw an Edgeworth box diagram to
show whether this allocation of resources is efficient. If it is explain why. If it is not, what changes
will make both parties better off?
1.) Using the three-point curved line drawing tool, draw an indifference curve for Jane when
consuming 11 liters of soft drinks and 10 sandwiches. Label this curve Uj.
2.) Using the three-point curved line drawing tool, draw an indifference curve for Bob when
consuming 9 liters of soft drinks and 10 sandwiches. Label this curve Uğ.
Carefully follow the instructions above, and only draw the required objects.
Sandwiches
0₁
Jane
11
Soft drinks
Bob
OB
10
Q
Jane has 9 liters of soft drinks and 12 sandwiches. Bob, on the other hand, has 11
liters of soft drinks and 8 sandwiches. With these endowments, Jane's marginal rate of
substitution (MRS) of soft drinks for sandwiches is 4 and Bob's MRS is equal to 3. Draw
an Edgeworth box diagram to show whether this allocation of resources is efficient. If it
is explain why. If it is not, what changes will make both parties better off?
1.) Using the three-point curved line drawing tool, draw an indifference curve for Jane
when consuming 9 liters of soft drinks and 12 sandwiches. Label this curve U,
Bob
11
2.) Using the three-point curved line drawing tool, draw an indifference curve for Bob
when consuming 11 liters of soft drinks and 8 sandwiches. Label this curve Up.
Carefully follow the instructions above, and only draw the required objects.
Jane
Soft drinks
Sandwiches
Chapter 16 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
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