Draw an Edgeworth box like the one in Figure 18.2 but with only these details inside:

the point V and budget line AB through V . Using indifference curves, depict the utilitymaximizing choice for Abner. Now let the budget line rotate to CD , drawn to refl ect a higher relative price of medical care. Again identify the utility-maximizing choice for Abner.

Transcribed Image Text:

Fo G E Food A Abner's offer curve Belinda's offer curve B DF Belinda OB OA Abner - Medicine- Mo Figure 18.2 The Intersection of Offer Curves Determines the Competitive Equilibrium