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The Accompanying Diagram Shows an Edgeworth Box Economy

Question 41

Multiple Choice

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
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.
-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.

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