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raw the Edgeworth box for Jane and Joseph and gin and tonic and draw a line representing all the points for which g = t
raw the Edgeworth box for Jane and Joseph and gin and tonic and draw a line representing all the points for which g = t for Jane, and all the points for which 2g = t for Joseph.
At which point would you recommend Jane and Joseph divide the gin and tonic to maximize societal welfare? Label it on the Edgeworth box.
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- Jane and Joseph really like gin and tonics, but Jane likes hers a little stronger than Joseph. Jane's utility function over gin and tonic is U(g,t) = min(g, t) and Joseph's is U(g,t) = min(2g, t). Joseph and Jane show up at a party and Joseph brought the tonic t = 1000 mL, and Jane brought the gin g= 750 mL. = - Jane and Joseph really like gin and tonics, but Jane likes hers a little stronger than Joseph. Jane's utility function over gin and tonic is U(g,t) = min(g, t) and Joseph's is U(g,t) = min(2g, t). Joseph and Jane show up at a party and Joseph brought the tonic t = 1000 mL, and Jane brought the gin g= 750 mL. =Step by Step Solution
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