Starting an Edgeworth box Width A+@1 =6+2=8
Starting an Edgeworth Box Width = 1 1 6 2 8 A B + = + =
Starting an Edgeworth box Height 02+m2 4+2 6 Width A+@1 =6+2=8
Starting an Edgeworth Box Width = 1 1 6 2 8 A B + = + = Height = 2 2 4 2 6 A B + = + =
Starting an Edgeworth box Height The dimensions of 02+m2 the box are the 4+2 quantities available 6 of the goods Width A+@1 =6+2=8
Starting an Edgeworth Box Width = 1 1 6 2 8 A B + = + = Height = 2 2 4 2 6 A B + = + = The dimensions of the box are the quantities available of the goods
Feasible allocations What allocations of the 8 units of good 1 and the 6 units of good 2 are feasible? How can all of the feasible allocations be depicted by the Edgeworth box diagram? One feasible allocation is the before trade allocation: ie, the endowment allocation
Feasible Allocations What allocations of the 8 units of good 1 and the 6 units of good 2 are feasible? How can all of the feasible allocations be depicted by the Edgeworth box diagram? One feasible allocation is the beforetrade allocation; i.e. the endowment allocation
The Endowment allocation Height= The endowment allocation is 0)+ a=(6,4) 4+2 and 6 B=(2 2) Width=1+=6+2=8
Width = 1 1 6 2 8 A B + = + = Height = 2 2 4 2 6 A B + = + = The endowment allocation is A = (6,4) B = (2,2). and The Endowment Allocation