In this case we can say that, for any society that values both buns
and gutters, point B would be preferred to point E. The light green shaded
area is all the points that would be preferred to point E. These represent bundles of the two goods that contain more of
both goods, thus these points must be better than point E. As before, we can't claim
that points A, C or D would be preferred to point E, but we can be certain about point
B.
Next Question
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved