Consider an economy that is composed only by two individuals, Ann and Zach, and where only No

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Consider an economy that is composed only by two individuals, Ann and Zach, and where only No goods are ayailable: chocolate and coffee. Ann has an endowment of 1DD grams of chocolate and 5DD grams of coffee, while Zach has an endowment of lDDD grams of chocolate and EDD grams of coffee. a} Describe the economy using an Edgeworth Box [you are free to assume any shape you want for their indifference curves). In your graph, is the initial allocation efficient? b] Describe how Ann and Zach can achieye mutuallybeneficial trades using the Edgeworth Box. c} Define and show the Contract curye. d] What changes if now there are market prices for chocolate and coffee

Posted Date: Jun 26, 2024 06:29 PM

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Consider an economy that is composed only by two individuals, Ann and Zach, and where only No

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