Answer to Question #198968 in Microeconomics for Mulweli

Question

With the aid of an Edgeworth 

box, illustrate and then discuss the above statement in light of Nozick’s Principles 

Answer 1

Nozick principle states that distribution of holdings in a society is only if everyone is entitled to what he has.

this can be illustrated with the aid of an Edgeworth 

box, as shown

The figure shows that there is no envy in the market since the rights are equally allocated.

$W{en}= (N,c)$ is the equal net division and $w^{en}=F^{w}(N,c^{en},R)$ the Walrasian equilibrium from the equal net division. $\pi (w^{en })$ is the allocation obtained by swapping the two bundles at $w^{en }$ . Note that, for each $i, w^{en }R_i \pi (w^{en })$ .Thus, $w^{en }$ satisfies net_no-envy.