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The edgeworth box interpretation and Pareto optimaity
The Edgeworth Box
Length: 10 pages (1775 Words)
The Edgeworth box diagram is a device used by economists to show how a given basket of goods can be efficiently and inefficiently distributed among a set of individuals. It is a graphical representation of the exchange problem faced by the parties in a two good exchange economy which allows a simple way of solving and visualizing their exchange problem.