Amaranda and Bartolo Consume Only Two Goods, X and Y

question 26

Multiple Choice

Amaranda and Bartolo consume only two goods, X and Y.They can trade only with each other and there is no production.The total endowment of good X equals the total endowment of good Y.Amaranda's utility function is U(x_A, y_A) = min{x_A, y_A} and Bartolo's utility function is U(x_B, y_B) =max{x_B, y_B}.In an Edgeworth box for Amaranda and Bartolo, the set of Pareto optimal allocations is

• A)the main diagonal.
• B)both diagonals.
• C)the whole Edgeworth box.
• D)the edges of the box and the main diagonal.
• E)the edges of the box.

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