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General equlibrium questions Question 4: General Equilibrium (30 points) Musk has an endowment of 8 units of good A and 4 units of good B.

General equlibrium questions

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Question 4: General Equilibrium (30 points) Musk has an endowment of 8 units of good A and 4 units of good B. Meanwhile, Jeff has an endowment of good A and good B as much as 4 units and 6 units, respectively. Musk's and Jeff's utility function are denoted by UM and U, , respectively. Their utility functions are represented by the following expression: UM = AMBM and Uj = Aj + BJ Answer the following questions: a. Determine the contract curve and the core allocation! (6 pts) b. Determine the pure exchange economy equilibrium (8 pts) c. Draw the full picture of the Edgeworth box from point a-c! (8 pts) d. Determine the competitive equilibrium which includes the price and the quantity of good A and B! (8 pts)

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