If Two People Have Identical Homothetic Preferences and If Their

question 51

True/False

If two people have identical homothetic preferences and if their indifference curves have a diminishing marginal rate of substitution, then in an Edgeworth box, the locus of Pareto optimal allocations between them is a diagonal straight line.

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Definitions:

Determinant

A numerical value derived from the components of a square matrix, capturing specific characteristics of the matrix.

Triangle

A polygon with three edges and three vertices.

Determinant

A number obtained from a square matrix's elements that represents some of the matrix's attributes.

Equation

A statement in mathematics that establishes the equivalence of two expressions, typically with variables.