Refer to the Diagram Below to Answer This Question

question 15

Essay

Refer to the diagram below to answer this question. The Edgeworth box diagram above reflects preferences and availability of goods on the two planets Bazaar and Economus.Bananas are only produced on the planet Bazaar while Eggplants are only produced on Economus.Due to the inability to transport goods between the two planets,the current consumption is indicated by point A.What is true about consumers' willingness-to-pay for Eggplants on Bazaar versus the planet Economus? Suppose that due to technological advances on both planets,the two planets may trade costlessly.What is likely to happen? Indicate the changes in the diagram above.Do the planets benefit by trading?

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Definitions:

Correspondence Bias

The tendency to attribute a person's behavior to their personality or disposition, rather than to external factors.

Stereotyping

The act of making generalized assumptions or beliefs about the characteristics of all members of a group based on simplified or standardized conceptions.

Defensive Attribution

The tendency to blame victims for their misfortune, so that one feels less likely to be victimized in a similar way.

News Account

A report or description of recent events or facts, provided by the media or a personal observation.