Question
An exchange economy has a total endowment w = (100, 150). Agent A has symmetric perfect complement utility u^(x^) = min{x^, x^^} while agent
An exchange economy has a total endowment w = (100, 150). Agent A has symmetric perfect complement utility u^(x^) = min{x^, x^^} while agent B has some Cobb-Douglas utility. (a) Solve for all interior points of the contract curve. (b) Argue that the upper right corner of the Edgeworth Box is also in fact part of the contract curve in this economy. (c) Graph the Edgeworth Box and the entire contract curve.
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Get StartedRecommended Textbook for
Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
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