![Assume: goods x, y; consumers A, M; total endowment of good x equals that of y, As preference: U-min(x,y), Ms preference: U=max(x,y] In an Edgeworth Box the set of Pareto-efficient allocations will consist of a. Two diagonals. b. One of the diagonals. c. The entire diagram (box) d. The diagonals and the outer borders of the diagram (box). e. The outer borders of the diagram (box)](http://img.homeworklib.com/questions/7099c060-03a7-11ec-a61b-3b248b723e37.png?x-oss-process=image/resize,w_560)
Homework Answers
Answer : The answer is option b.
Because when we join up all Pareto efficient allocation points for two individuals in Edgeworth Box then we get a diagonal line which shows the set of Pareto efficient allocations. This joining diagonal line is called contract curve. Therefore, option b is correct.
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