Entrevista com Friedman - conservador x liberalismo

Keynes x Hayek

Ativem a Legenda.

Brief notes on the Edgeworth box

The dimensions of this diagram are given by the total quantities of labor and capital available. Quantities of these resources devoted to X production are measured from origin 0x; quantities devoted to Fare measured from 0y. Any point in the box represents a fully employed allocation of the available resources to the two goods.

This diagram adds production isoquants for X  and Y to Figure below (Edgeworth Box Diagram of Efficiency in Production). It then shows technically efficient ways to allocate the fixed amounts of K and L between the production of the two outputs. The line joining Ox and Or is the locus of these efficient points. Along this line the RTS (of L for K) in the production of good Xis equal to the RTS in the production of Y.

Okay, perfect! in the world where the balance of choices between the goods and services are part of a mediocre reasoning. The idea of maximizing utility is old and outdated. The current capitalist dynamics is based on the violation of the stronger assumptions: supply and demand. In most cases the production takes into account the fixed-rate contracts with major corporations and demand is based on subjective forces of repressed consumption or the consumption of substrate wealthy consumers. Prices are not determined by these forces, more so, by mechanisms that are developing. This is just a way to express our feelings when we see things like the Edgeworth Box.

Thanks,

Prof. Carlos Eduardo