In an Edgeworth Box Diagram,which of the Following Statements Is

question 81

Multiple Choice

In an Edgeworth box diagram,which of the following statements is incorrect?

• A)A point of tangency between two indifference curves identifies the uniquely best distribution of goods between consumers.
• B)It is possible to move from an inefficient point to an efficient point in a way that makes one consumer better off and the other no worse off.
• C)Some inefficient distributions of the good may be preferred to some efficient distributions on equity grounds.
• D)It is possible to move from a point off the contract curve to a point on the contract curve and make both consumers better off.

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied matches the quantity of goods demanded, leading to market stability.

Oligopoly

A market structure characterized by a small number of firms whose decisions affect and are affected by each other, leading to strategic behavior.

Automobile Manufacturing

The industry and process involved in the design, development, production, marketing, and sale of motor vehicles.

Cotton Farming

The agricultural practice of cultivating the cotton plant for its fibers, which are harvested and processed into textile products.