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17:13 0 By JM . Class Test 2.pdf - Saved O . . . Class Test 2 In a pure exchange economy with two goods,
17:13 0 By JM . Class Test 2.pdf - Saved O . . . Class Test 2 In a pure exchange economy with two goods, G and H, the two traders have Cobb-Douglas util- ity functions. Amos' utility is Ua = (Ga)"(Ha)1-a and Elise's is Ue = (Ge)B(He)1 -B. What are their marginal rates of substitution? Between them, Amos and Elise own 100 units of G and 50 units of H. Thus, if Amos has Ga and Ha, Elise has Ge = 100 - Ga and He = 50 - Ha. Solve for their contract curve. Show all your calculations clearly, from your marginal utilities. 1 of 1 O
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