Figure 6-1 shows the distribution of steak and wine between Monica and Hank.
Figure 6-1
ref SHAPE \* MERGEFORMAT
-In Figure 6-1,points on the contract curve would include _____.
A)A and J
B)J and K
C)H and A
D)K and L

Question

Figure 6-1 shows the distribution of steak and wine between Monica and Hank.
Figure 6-1
ref SHAPE \* MERGEFORMAT 
-In Figure 6-1,points on the contract curve would include _____.
A)A and J 
B)J and K 
C)H and A 
D)K and L

Quizplus · Accepted Answer

The contract curve represents the set of mutually beneficial allocations for both parties. In Figure 6-1, points on the contract curve would mean that both Monica and Hank are better off as compared to their current allocation. The only points that lie on the contract curve are J and K, where each of them receives more of what they prefer. Therefore, the best choice would be J and K.

Figure 6-1 Shows the Distribution of Steak and Wine Between