Any point in an Edgeworth box defines a(n)
A) no-trade allocation
B) feasible allocation
C) equilibrium allocation

Question

Quizplus · Accepted Answer

Any point in the Edgeworth Box that lies within the bounds of the production possibilities frontier of both individuals represents a feasible allocation, meaning that it is possible for both individuals to produce and consume those goods. On the other hand, a point outside the PPF is not feasible. Although an equilibrium allocation is possible in the Edgeworth box, it is not true for all points in the diagram. Thus, the correct answer is B, feasible allocation.

Any Point in an Edgeworth Box Defines A(n)