Explain trade by using an edgeworth box diagram


John has 40 gallons of gasoline (G) and 20 bags of sugar (S). For that market basket, John's MRSSG is 3G/1S. Maria has 40G and 50S. For that market basket, Maria's MRSSG is 1G/1S. Use a numerical example to explain how a trade can benefit both of them. Illustrate the trade by using an Edgeworth box diagram, showing that both consumers can reach higher indifference curves.

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Microeconomics: Explain trade by using an edgeworth box diagram
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