Suppose Humphrey starts out with four pounds of food and seven gallons of water, while Lauren starts out with eight pounds of food and five gallons of water. Draw an Edgeworth box that shows all possible allocations of these goods, and plot the endowment points. Now suppose that both Lauren and Humphrey’s preferences correspond to the utility function U(F, W) = min{F, W} (where F refers to pounds of food and W refers to gallons of water). This is a case of perfect complements. Add Humphrey and Lauren’s indifference curves to the Edgeworth box. Then draw the contract curve. To which points on the contract curve is each consumer willing to trade?

The cook corporation has two divisions--east and west. the divisions have the following revenues and expenses: east west sales $ 603,000 $ 506,000 variable costs 231,000 300,000 traceable fixed costs 151,500 192,000 allocated common corporate costs 128,600 156,000 net operating income (loss) $ 91,900 $ (142,000 ) the management of cook is considering the elimination of the west division. if the west division were eliminated, its traceable fixed costs could be avoided. total common corporate costs would be unaffected by this decision. given these data, the elimination of the west division would result in an overall company net operating income (loss)