The accompanying diagram shows an Edgeworth box economy. The initial endowment is point O. At current relative prices, Augie chooses point X and Bev chooses point Y
-Refer to Edgeworth Box Economy.In an Edgeworth box,points within the region of mutual advantage represent allocations that
A) can be achieved by a competitive market.
B) both consumers prefer to the initial endowment.
C) exhaust the potential gains from trade.
D) are Pareto optimal.
Correct Answer:
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