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Hello! I am struggling to answer the following Edgeworth Box practice problems. Can someone please help me? Thanks!! I am given the following utility functions
Hello! I am struggling to answer the following Edgeworth Box practice problems. Can someone please help me? Thanks!!
I am given the following utility functions for two consumers (Brian and Charlie):
uB(XB,YB)=XB*YB with endowment EB=(2,2)
uC(XC,YC)=XC*(YC)^2 with endowment EB (3,3)
The question is asking me the following questions:
- Is the initial endowment point a Pareto efficient Allocation?
- If we are given the allocation (XB,YB) = (4,1) and (XC,YC) = (1,4), is this allocation a Pareto improvement over the endowment?
- Solve the the contract curve (find the set of Pareto efficient allocations)
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