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In a Two-Person, Two-Good, Exchange Economy, Both Consumers Have Quasilinear

Question 30

Multiple Choice

In a two-person, two-good, exchange economy, both consumers have quasilinear utility functions, linear in good 2.If quantities of good 1 are measured horizontally and quantities of good 2 are measured vertically in the Edgeworth box, the set of Pareto optimal allocations includes


A) a horizontal line through the interior of the box.
B) a vertical line.
C) a straight line from the lower left to the upper right corner of the box.
D) a curved line from the lower left to the upper right corner of the box.
E) all four edges of the box.

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