General Equilibrium

Consider a market with two goods, x and z, and two consumers, A and B. The utility functions for consumers A and B are as follows

U _A = x ^{1 /3}_A z ^{2/ 3}_A

U _B = x ^2/3_B z ^1/3_B

and the initial endowments for each consumer are

e_A = (4, 2) e_B = (2, 6)

where consumer B is endowed with 2 unit of good x and 6 units of good z, respectively.

a) Draw the Edgeworth Box (Don't worry about the shape of the utility curves. Just pick a general shape that we have used before).

b) Derive the contract curve.