Answer to Question #200397 in Microeconomics for vtg

Question

The Recent May 2021 Arab (Palestinian)-Israeli conflict, arose from the alleged usurping of the Arab land East of the Old city of Jerusalem from the current Arab Owners to Israeli families who claim to have owned the land previously. These recurrent conflicts have their foundation in the 1948 establishment of the state of Israel. To create lasting peace, would Pareto theory of justice be sufficient for the distribution of land in Israel specially in Jerusalem. With the aid of an Edgeworth box, illustrate and then discuss the above statement in light of Nozick’s Principles of Justice. 

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