The Edgeworth Box should
A) lie inside the PPF.
B) lie partially inside the PPF.
C) lie completely outside of the PPF.
D) never touch the PPF.

Question

Quizplus · Accepted Answer

The Edgeworth Box represents all the possible distributions of resources between two consumers in an economy, assuming a fixed amount of resources. It should lie inside the Production Possibility Frontier (PPF), which represents the maximum possible production of two goods given a fixed amount of resources, because the PPF defines the outer boundary of possible production capabilities, while the Edgeworth Box deals with distribution within those capabilities.

The Edgeworth Box Should