The Edgeworth Box: An economy consists of two people with utility functions: u₁ = min(x, y) and u₂ = min(x, y). Their initial endowments are (ri, y) = (6,6) and (2, 2) = (10, 10). Draw the Edgeworth for this economy, labeling the axes for each person, the initial endowment, and each person's indifference curve at this initial endowment. Is this economy in equilibrium?

Q&A Education