Question

Lamar has 20 Oranges and 15 Apples

Maria has 10 Oranges and 35 Apples
Draw an Edgeworth Box illustrating this situation. Be sure your drawing includes:
Labeling the sides with the names of the individuals.
Labeling the minimum and maximum values on each side.
The initial allocation point, including marking the values on each side.
Sample indifference curves through the allocation point for Lamar and Maria.

Answer 1

The Edgeworth-Bowley Fund basically has financial information provided by the two economic actors participating in the exchange. In this way, the indifference curves and the assigned quantities (initial allocations) of the two goods present in their respective consumption baskets are included.

By means of a square both individuals face each other, as two opposite diagrams. The first is located in the lower left corner and the second in the upper right (points 0). Alternatively, the ordinate and abscissa axes are used to represent the quantities of each merchandise, with the result that the width of the box is the quantity of good 1 and the height is that of good 2.

Then, taking into account the box built and the distribution of the products, the indifference curves of each part are drawn.

Step-by-step explanation:

The Edgeworth box for the proposed exercise is attached as an attachment below:

Please download the attached file, we can see the indifference curves of each part for both Lamar and Maria.