16.2 Efficiency in Exchange ▣Exchange economy(佼换经济)-Market in which two or more consumers trade two goods among themselves. Efficient allocation-Allocation of goods in which no one can be made better off unless someone else is made worse off. 口Edgeworth box(埃奇沃斯盒形-Diagram(际圈)showing all possible allocations of either two goods between two people or of two inputs between two production processes
16.2 Efficiency in Exchange Exchange economy(交换经济)-Market in which two or more consumers trade two goods among themselves. Efficient allocation-Allocation of goods in which no one can be made better off unless someone else is made worse off. Edgeworth box (埃奇沃斯盒形图)-Diagram (示图) showing all possible allocations of either two goods between two people or of two inputs between two production processes
Karen's Food 10F 4F 3F 0水 6C James's Karen's Clothing Clothing 2C B 一● 4CY +1C 1C 5C -1F 6C 0 6F 7F 10F James's Food Exchange in an Edgeworth Box
Exchange in an Edgeworth Box
Each point in the Edgeworth box simultaneously represents James's and Karen's market baskets of food and clothing. At A,for example,James has 7 units of food and 1 unit of clothing,and Karen 3 units of food and 5 units of clothing
Each point in the Edgeworth box simultaneously represents James's and Karen's market baskets of food and clothing. At A, for example, James has 7 units of food and 1 unit of clothing, and Karen 3 units of food and 5 units of clothing
10F Karen's Food OK 6C James's Karen's Clothing Clothing u A u好 luk 6C 01 James's Food 10F Efficiency in Exchange
Efficiency in Exchange
The Edgeworth box illustrates the possibilities for both consumers to increase their satisfaction by trading goods. If A gives the initial allocation of resources,the shaded area describes all mutually beneficial trades
The Edgeworth box illustrates the possibilities for both consumers to increase their satisfaction by trading goods. If A gives the initial allocation of resources, the shaded area describes all mutually beneficial trades