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Tagged with edgeworth-box international-trade
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In a box diagram, why does efficiency locus lie on one side of the diagonal, if both sectors haves constant returns to scale function?
The following is what I understand, so far.
If we measure labour in the $x$-axis and capital in the $y$-axis, the slope of diagonal of the box is the capital-labour ratio $K/L$ in the economy. Let $A$ ...
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