Question

Can someone please explain the edgeworth box in a simple way to me?

Answer 1

Answer : Edgeworth box is that box in which we can show the different different distribution levels of available resources. Edgeworth box has two types : vertical edgeworth box and horizontal edgeworth box. By edgeworth box we can show the consumption bundles of two consumers. Any point in this box shows the consumption bundles of two goods for consumers. For example, Pareto optimal condition is shown by the edgeworth box. The edgeworth box is shown by the following diagram :

In the above diagram ICA1, ICA2, ICA3, ICA4 shows the indifference curves for consumer A and ICB1, ICB2, ICB3, ICB4 are the indifference curves for consumer B.