In a two-person, two-good, exchange economy, both consumers have quasilinear utility functions, linear in good 2.If quantities of good 1 are measured horizontally and quantities of good 2 are measured vertically in the Edgeworth box, the set of Pareto optimal allocations includes
A)a horizontal line through the interior of the box.
B)a vertical line.
C)a straight line from the lower left to the upper right corner of the box.
D)a curved line from the lower left to the upper right corner of the box.
E)all four edges of the box.

Question

In a two-person, two-good, exchange economy, both consumers have quasilinear utility functions, linear in good 2.If quantities of good 1 are measured horizontally and quantities of good 2 are measured vertically in the Edgeworth box, the set of Pareto optimal allocations includes
A)a horizontal line through the interior of the box. 
B)a vertical line.
C)a straight line from the lower left to the upper right corner of the box.
D)a curved line from the lower left to the upper right corner of the box.
E)all four edges of the box.

Quizplus · Accepted Answer

The Answer of In a two-person, two-good, exchange economy, both consumers have quasilinear utility functions, linear in good 2.If quantities of good 1 are measured horizontally and quantities of good 2 are measured vertically in the Edgeworth box, the set of Pareto optimal allocations includes
A)a horizontal line through the interior of the box. 
B)a vertical line.
C)a straight line from the lower left to the upper right corner of the box.
D)a curved line from the lower left to the upper right corner of the box.
E)all four edges of the box.

In a Two-Person, Two-Good, Exchange Economy, Both Consumers Have Quasilinear