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Using an Edgeworth Box, show how you would derive the Utility Possibility Frontier for an exchange economy. Outline in detail (using diagrams as appropriate)

 

Using an Edgeworth Box, show how you would derive the Utility Possibility Frontier for an exchange economy. Outline in detail (using diagrams as appropriate) the three conditions for Pareto efficiency of a production economy. For each con- dition, provide an example of a market failure that prevents the econ- omy achieving efficiency.

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