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Exchange economy Consider a trading economy with 2 agents: Adam {A} and Birthe {B}. They have preferences over two benefits 1 and 2. Adam has

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Exchange economy

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Consider a trading economy with 2 agents: Adam {A} and Birthe {B}. They have preferences over two benefits 1 and 2. Adam has a utility function: u\" = min {xix'} and Birthe has utility: u\" = of)\": (2:23)\"? Adam was born with initial inventory (mfg?) = (20,0) while Birthe has (5913,5923) = (0,10) 2.a) Draw an Edgeworth box and illustrate the indifference curves of the two agents [by hand or with a program of your choice]. 2.b) Add the contract curve to your illustration. 2c] Find the market balance {normalize the price ofgood 1to 1] 2.cI) Is the market balance on the contract curve? why? Interpret

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