The Textbook Has Developed the Edgeworth Box Diagram and the Concept

question 26

Essay

The textbook has developed the Edgeworth box diagram and the concept of the production efficiency locus or contract curve in the context of the production of two goods with two factors. Apply the Edgeworth box apparatus to the context of consumption of two goods by two consumers, and, in particular, explain how welfare for the two consumers as a whole when on the contract curve relates to welfare when the consumers are not on the contract curve.

---

Definitions:

Merit System

A system of employment and promotion based on the skills, performance, and abilities of employees rather than on nepotism or patronage.

Equal Pay Act

A federal law that prohibits wage discrimination based on sex, ensuring equal pay for equal work performed by men and women.

Family and Medical Leave Act

A United States law that provides eligible employees with unpaid, job-protected leave for certain family and medical reasons.

Private Employers

Individuals or entities that operate businesses or hire workers in the private sector, as opposed to government entities.