Suppose two coffee snobs who must have their coffee and cream in exact proportions (each cup is 10 coffee per 1 unit cream) are invited to a weekend long event (during which they can easily consume 8 cups of coffee). Suppose Snob A is given 8 units of cream and Snob B is given 80 units of coffee. The contract curve in the Edgeworth box would be
a. a right angle connecting the lower left corner with the upper right corner.
b. a curve (not a line) connecting the lower left corner with the upper right corner.
c. a line connecting the lower left corner with the upper right corner.
d. a right angle connecting the upper left corner with the lower right corner.
c
Economics
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Long-run aggregate supply corresponds to the level of potential output.
a. true b. false
Economics
Under imperfect competition, a firm's:
a. demand curve lies below its marginal revenue curve. b. demand curve lies above its marginal revenue curve. c. demand curve coincides with its marginal revenue curve. d. demand curve coincides with its marginal cost curve. e. demand curve coincides with its average cost curve.
Economics