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Microeconomics

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Straight Edge

MICRO-DYWN6C

Robert and Richard are very straight-edge, so much so that their indifference curves are straight lines (not the pleasantly curved ones that most people have). Being straight-edge also leads to consuming boring goods: Good X and Good Y.

Robert (or Rob for short) has an initial endowment of 15 Good X's and 25 Good Y's. Richard has an initial endowment of 15 Good X's and 20 Good Y's. Based on this initial endowment of goods (labeled "O") and their indifference curves as illustrated below, answer the following questions.