Figure E5.7 - Indifference Curves and Feasible Frontier for Cobb-Douglas Preferences
Figure E5.7 is a graph that visually represents the feasible frontier and a set of indifference curves for a scenario where Angela has Cobb-Douglas preferences. The figure highlights that the points on different indifference curves where the slope matches that of the feasible frontier occur at different values of free time (). This visual aid is part of an example used to determine the Pareto efficiency curve. The feasible frontier in the graph is derived from the production function , while Angela's indifference curves are based on a Cobb-Douglas utility function where the parameter is set to 8/13.
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Activity: Calculating MRS and MRT for the Cobb-Douglas Example