2.5 Adrienne and Sarah consume pizza, Z, and cola, C. Adriennes utility function is UA = ZACA,...

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2.5 Adrienne and Sarah consume pizza, Z, and cola, C. Adrienne’s utility function is UA = ZACA, and Sarah’s is Z0.5 D C0.5 D . Adrienne’s marginal utility of pizza is MUZA

= CA.

Similarly, MUAC

= ZA, MUDZ

= 12 Z-0.5 D C0.5 D , and MUDC

= 12 Z0.5 D C-0.5 D . Their endowments are ZA = 10, CA = 20, ZD = 20, CD = 10.

a. What are the marginal rates of substitution for each person?

b. What is the formula for the contract curve?

Draw an Edgeworth box and indicate the contract curve. A

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Microeconomics

ISBN: 9780133456912

7th Edition

Authors: Jeffrey M. Perloff

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Question Posted: Nov 15, 2024 05:00 AM

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2.5 Adrienne and Sarah consume pizza, Z, and cola, C. Adriennes utility function is UA = ZACA, and Sarahs is Z0.5 D C0.5 D . Adriennes marginal utility of pizza is MUZA = CA. Similarly, MUAC = ZA,...
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2.5 Adrienne and Sarah consume pizza, Z, and cola, C. Adriennes utility function is UA = ZACA,...

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Microeconomics

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