Which of the following is not true of Edgeworth Box Diagrams?
A)Smooth convex indifference curves indicate Pareto optimalities.
B)Indifference curves are convex to the appropriate origin.
C)Their dimensions reflect the available quantities of two goods.
D)Each point indicates a consumption bundle.

Question

Quizplus · Accepted Answer

Smooth convex indifference curves in an Edgeworth Box Diagram indicate preferences, not Pareto optimalities. Pareto optimalities are identified where indifference curves are tangent to each other, indicating no further trades can make one individual better off without making another worse off.

Which of the Following Is Not True of Edgeworth Box