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Results tagged with edgeworth-box
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user 30614
2
votes
Shape of contract curve in an Edgeworth-Box economy
This answer assumes you understand the defining property of homothetic functions, namely, slope of their level curves being equal for a given input ratio. First let's understand what is the diagonal; …
- 165
1
vote
In a box diagram, why does efficiency locus lie on one side of the diagonal, if both sectors...
I have understood why constant returns to scale imply efficiency locus lying on one side of the diagonal, but not why this does not imply that there are no factor intensity reversals taking place.
My …
- 165