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Unformatted text preview: and Philip has the utility func-tion 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 Morriss consumptions from the lower left corner of the box, then the contract curve contains a. a straight line running from the upper right corner of the box to the lower left. b. a curve that gets steeper as you move from left to right. c. a straight line with slope passing through the lower left corner of the box. d. a straight line with slope passing through the upper right corner of the box. e. a curve that gets flatter as you move from left to right. 3. In Problem 1, can you solve for the equilibrium prices and quantities? If not, what additional information do you need? ge pbms Answer Section MULTIPLE CHOICE 1. ANS: B PTS: 1 DIF: 2 2. ANS: D PTS: 1 DIF: 3 3. look at pp 576-77 of text and follow method...
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This note was uploaded on 08/25/2009 for the course ECON 302 taught by Professor Toossi during the Spring '08 term at University of Illinois at Urbana–Champaign.
- Spring '08