The Accompanying Diagram Shows an Edgeworth Box Economy

Multiple Choice

The accompanying diagram shows an Edgeworth box economy. The initial endowment is point O. At current relative prices, Augie chooses point X and Bev chooses point Y

-Refer to Edgeworth Box Economy.Analysis of an Edgeworth box economy shows that a competitive equilibrium

A) must be Pareto optimal.
B) can be located anywhere along the contract curve.
C) may lie anywhere within the region of mutual advantage.
D) must lie to the southeast of the endowment point.