Plotting Initial Endowment on the Edgeworth Box Graph
Not what you're looking for?
Question: How do you plot the following initial endowment on a Edgeworth box graph? Do the utility functions come into play in any way?
XA = (0, 4), XB = (4, 2), UA = 2X1 + X2, UB = X1+2X2
Purchase this Solution
Solution Summary
This solution explains the concept of the Edgeworth box graph in a detailed manner and also draws out a couple of example graphs in an attached Word document. The explanation provided in the response is concise and clear, yet easy to understand. This is a complex topic to understand, but the response provides enough insight on this topic so that this concept can be easily understood.
Solution Preview
Please view the attached file for example graphs, which are being referenced in the following response.
Obviously, e1A+e1B = 4, e2A+e2B = 6. It's easy to draw out an Edgeworth Box like in Figure. 1. From UA = 2X1 + X2, we can say that A's indifference curves are parallel lines with a slope of 1/2. ...
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.