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Consider an exchange economy with 2 agents and 2 goods. a) In an Edgeworth-Bowley diagram, show and illustrate that if both agents have the same

Consider an exchange economy with 2 agents and 2 goods.

a) In an Edgeworth-Bowley diagram, show and illustrate that if both agents have the same preferences, the contract curve is a straight line from the bottom left-hand corner to the top right-hand corner. Explain. (3 marks)

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