(Solved): 6. Introduction to the Edgeworth box Suppose Antonio and Caroline are the only two residents on an ...

6. Introduction to the Edgeworth box Suppose Antonio and Caroline are the only two residents on an island, and each of them has an initial endowment of bananas and apples. Antonio's initial endowment is 5 bananas and 3 apples, and Caroline's initial endowment is 2 bananas and 4 apples. The total endowment of bananas in this economy is , and the total endowment of apples is Now consider the following Edgeworth box, which shows all the possible distributions of bananas and apples between Antonio and Caroline if they engage in trade solely with each other. Antonio's indifference curve is given by the lower curve (blue) and corresponds to the axes with the origin on the bottom left. Caroline's indifference curve is given by the inverted curve (purple) and corresponds to the axes with the origin on the upper right. The initial endowment bundles are represented by point In the following table, each statement describes how well off Antonio and Caroline are at a particular point relative to their initial endowment point. For each statement, select the letter representing the point for which the statement is true. (?) BANANAS (Caroline's Origin)