The endowment point in an Edgeworth box:
A)shows the efficient allocation of resources.
B)shows the optimal allocation of resources.
C)shows the initial allocation of resources.
D)shows the equitable allocation of resources.

Question

Quizplus · Accepted Answer

The endowment point in an Edgeworth box represents the initial allocation of resources between two individuals or entities. It shows how much of each good each person starts with before trade or exchange occurs. Therefore, answer choice C is correct. Answer choices A, B and D are incorrect as they do not accurately describe the purpose of the endowment point.

The Endowment Point in an Edgeworth Box