Suppose That Morris Has the Utility Function U(b, W)= 6b

question 9

Multiple Choice

suppose that Morris has the utility function U(b, w) = 6b + 6w and Philip has the utility function U(b, w) = bw.If we draw an Edgeworth box with books on the horizontal axis and wine on the vertical axis and if we measure Morris's consumptions from the lower left corner of the box, then the contract curve contains

• A)a straight line with slope 1/1 passing through the upper right corner of the box.
• B)a curve that gets steeper as you move from left to right.
• C)a straight line running from the upper right corner of the box to the lower left.
• D)a straight line with slope 1/1 passing through the lower left corner of the box.
• E)a curve that gets flatter as you move from left to right.

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Definitions:

Revenue Act of 1916

A United States federal law that aimed to increase tax revenues for the preparation of World War I, imposing an excess profits tax and increasing estate and income taxes.

Espionage Act

A United States federal law passed in 1917 that was designed to prevent the support of U.S. enemies during wartime, making it a crime to promote insubordination in the military or to interfere with military recruitment.

AFL

The American Federation of Labor, a national federation of labor unions in the United States founded in 1886, focusing on better wages, hours, and working conditions.

War Effort

The collective actions and resources of a nation or group of nations mobilized to support military operations during a time of war.