Answer to Question #211372 in Microeconomics for Ndanu

Question

Construct an edge worth box diagram and show how production, efficiency and

equilibrium is achieved in an economy

Answer 1

The points X1, X2 and X3 points out the separate allocations of good X and good y to the consumer A and B. At X1, consumer A is on his indifference curve, A1 and consumer B on indifference curve E3.