Marvin's Utility Function Is U_m(x₁,x₂)= X_1m + 2x_2m, Where X_1m

question 82

Multiple Choice

Marvin's utility function is U_m(x₁,x₂) = x_1m + 2x_2m, where x_1m and x_2m are quantities of goods x₁ and x₂ he chooses. Similarly, Shelly's utility function is U_s(x₁,x₂) = 2x_1s + x_2s. In total they have 10 units of x₁ and 10 units of x₂. In an Edgeworth Box Diagram, where Marvin's origin is at the lower left and Shelly's is at the upper right, and where quantities of x₁ are measured on the horizontal axis and x₂ on the vertical axis, the contract curve is:

• A)the sides of the box which intersect at the northwest corner.
• B)the diagonal of the box from Marvin's origin to Shelly's origin.
• C)the sides of the box which intersect at the southeast corner.
• D)the line tying the origin with the endowment point.

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