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(5) Consider an exchange economy with two consumers and two goods. Consumer A has utility function uA(:I:A) = $14 + 3'24 and initial endowment to
(5) Consider an exchange economy with two consumers and two goods. Consumer A has utility function uA(:I:A) = $14 + 3'24 and initial endowment to\" = (3,6). Consumer B has utility function uB(a:B) = 1:? . 3:23 and initial endowment 11:3 = (3, 6). (a) Is the initial endowment a Pareto efcient allocation? Justify your answer. (b) Find a competitive equilibrium (p, 3A, :33) for the economy. (0) Construct the contract curve. A picture here is not a complete answer; you need to specify analytically the set of points that are in the contract curve
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