Suppose Two People Start with an Initial Endowment and Trade

question 18

Multiple Choice

Suppose two people start with an initial endowment and trade until they obtain a Pareto-efficient allocation with the corresponding price line.What happens when more people who have the same tastes and endowments as the original two traders are included in the Edgeworth box analysis?

• A) The price line does not change.
• B) The price line becomes flatter.
• C) The price line becomes steeper.
• D) The price line shifts up or down depending upon how many of each type of trader is included in the analysis.

---

Definitions:

House Of Representatives

One of the two houses of the United States Congress, the lower house, responsible for making and passing federal laws.

Directly Elect

Directly elect refers to a process where officials are selected through votes cast directly by the populace, without the intervention of intermediary electors or bodies.

Original Constitution

The fundamental governing document of the United States, ratified in 1788, outlining the national government's structure and powers.

State Empowerment

State empowerment refers to the process or actions taken to increase the political power, autonomy, and capacity of state institutions to govern and make decisions.