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Consider an exchange economy with two goods (x and y) and two agents (a and b). Agent a has preferences represented by u a (x

Consider an exchange economy with two goods (x and y) and two agents (a and b). Agent a has preferences represented by ua(xa, ya) = xaya and endowment (xa , ya ) = (2, 3). Agent b has preferences represented by ub(xb, yb) = min{xb, 2yb} and endowment (xb , yb) = (6, 1).

(a) Compute and draw the contract curve, the core, and all Walrasian equilibria.

(b) Repeat part (a), but where agent a has preferences represented by max{xa, 2ya}.

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