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(10 points) In an Edgeworth box, illustrate that a Pareto-efficient equilibrium, point a, can be
obtained by competition, given an appropriate endowment. Do so by identifying an initial
endowment point, b, located somewhere other than at point a, such that the competitive
equilibrium (resulting from competitive exchange) is a. Explain.

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(10 points) In an Edgeworth box, illustrate that a Pareto-efficient e.pdf

  • 1. (10 points) In an Edgeworth box, illustrate that a Pareto-efficient equilibrium, point a, can be obtained by competition, given an appropriate endowment. Do so by identifying an initial endowment point, b, located somewhere other than at point a, such that the competitive equilibrium (resulting from competitive exchange) is a. Explain.