The Edgeworth box illustrates possibilities for Karen and James to increase their satisfaction bytrading goods. If point A gives the initial allocation of food and clothing, a movement into theshaded area: 7)A)leaves James better off, but Karen worse off.B)leaves James and Karen better off.C)leaves James and Karen worse off.D)leaves Karen better off, but James worse off.

Respuesta :

The question is incomplete, here is the complete one gotten from google:

The Edgeworth box illustrates possibilities for Karen and James to increase their satisfaction by trading goods. If point A gives the initial allocation of food and clothing, a movement into the shaded area (The Edgeworth box is the attached image):

A) leaves James better off, but Karen worse off.

B)leaves James and Karen better off.

C)leaves James and Karen worse off.

D)leaves Karen better off, but James worse off.

Answer:

The Edgeworth box illustrates possibilities for Karen and James to increase their satisfaction by trading goods. If point A gives the initial allocation of food and clothing, a movement into the shaded area leaves Karen better off, but James worse off - option D

Explanation:

In the attached image, the shaded area is the current indifference curve of both James and Karen. Therefore, upon the movement to the shaded area, a higher utility will be provided to both James and Karen, such that both of them will be better off.

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