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(4) (34 points) Agents A and B participate in an exchange economy where two goods are exchanged. Agent A is endowed with (10, 2) and
(4) (34 points) Agents A and B participate in an exchange economy where two goods are exchanged. Agent A is endowed with (10, 2) and agent B is endowed with (2, 8) (a) (1 point) What is the total quantity of goods 1 and 2 in the economy? (b) (1 point) Plot the Edweworth box and the endowment of the agents. Make sure the dimensions of the box are labeled (c) (2 points) What is a Pareto efficient bundle and how does it relate to the contract curve? (d) (5 points) Assume uA(TA, VA) = TA YA 1/312/3 and up(TB,VB) = CB VB . 1/3, 2/3 Find and plot the contract curve. Show your work (e) (5 points) Assume uA(CA, VA) = min(5xA, 6yA) and us(TB, yB) = min(5xg, 6y;). Find and plot the contract curve. Show your work (f) (5 points) Assume uA(CA, yA) = min(CA, yA} and us(FB, yB) = min(xB, yB}. Find and plot the contract curve. Show your work (g) (5 points) Assume uA(CA, YA) = CA + yA and us(CB, VB) = 5x8 + yB. Find and plot the contract curve. Show your work (h) (5 points) Assume uA (CA, yA) = IA"y, and us(TB, UB) = Ig y . Find the optimal consumption bundles (rb, yb), (r), y)) and the equilibrium price (i) (5 points) Assume uA(CA, yA) = min (5:A, 6yA} and uB(TB, yB) = min(5xB, 698). Find the opti- mal consumption bundles (x;,#;), (*%, #%) and the equilibrium price
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