In the Edgeworth Box Diagram, If the Initial Allocation of Consumer

question 12

Multiple Choice

In the Edgeworth box diagram, if the initial allocation of consumer goods is off the contract curve, then we can be sure that

• A)both parties can be made better off.
• B)trade will occur if allowed and transactions costs are high.
• C)the initial allocation is unfair.
• D)the MRS of each consumer is the same.

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