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5. Consider the Edgeworth Box diagram below for two individuals named Ernst Robinson and Fn'tz Robinson who are stranded on a deserted island. . Answer
5. Consider the Edgeworth Box diagram below for two individuals named Ernst Robinson and Fn'tz Robinson who are stranded on a deserted island. . Answer the Ffltl questions in parts (a)- (i). (Note, in all cases. partial credit will be awarded based on your explanations.) 3) Suppose Emst and Fritz have 2 commodities: coconuts and sh. Ernst has a total of 100 coconuts and 25 sh. Fritz has 50 coconuts and 75 sh. Label the four sides of the Edge-worth Box appropriately, (3 points) b) In the Edgeworlh Box. label their respective utility (indifference) El' [15! curves and indicate which utility (indifference) represents a higher level of satisfaction. (3 points) g) In the graph to the right, construct a utility possibilities curve. Label the axes. Include enough information in the graph here and the Edgeworth Box in part (d) to show how they are connected. Briey explain. (5 points) h) Suppose the social welfare function is W = 4UEmst + 2UFritz. In the graph for part (9), add two social indifference curves corresponding to the social welfare function as dened. Label these social indifference curves as we did in class. (4 points) i) Based on part (h). determine the socially optimal solution. Note: you may likely need to draw a third social indifference curve that is consistent with the ones drawn for part (h). Be sure to clearly label your analysis in the graph. (3 points}
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