14.Suppose the Economics Department has a graduation party for its students but as a final test they must show they have learned something about trade. The men are given food when they walk in and the women are given drink. Suppose they have identical preferences where food and drink provide utility U = FD. The contract curve in the Edgeworth box using a representative man and woman would be

a.

a right angle connecting the lower left corner with the upper right corner.

b.

a curve (not necessarily a line) connecting the lower left corner with the upper right corner.

c.

a line connecting the lower left corner with the upper right corner.

d.

a right angle connecting the upper left corner with the lower right corner.

ANSWER:

b

16.Suppose the Economics Department has a graduation party for its students but as a final test they must show they have learned something about trade. The men are given food when they walk in and the women are given drink. Suppose they have very different preferences where food and drink provide utility. For men U = FD. For women U=min(F,D) The contract curve in the Edgeworth box using a representative man and woman would be

a.

a right angle connecting the lower left corner with the upper right corner.

b.

a curve (not necessarily a line) connecting the lower left corner with the upper right corner.

c.

a line connecting the lower left corner with the upper right corner.

d.

a right angle connecting the upper left corner with the lower right corner.

ANSWER:

c

Notes: Please explain the difference between the two answers above. Do not copy from previous solutions already posted. Show all the steps. Thanks.