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I don't know how to solve a problem with the Edgeworth box. Can you solve this and provide in-depth information on how and why you
I don't know how to solve a problem with the Edgeworth box. Can you solve this and provide in-depth information on how and why you are doing each step?
1) Suppose you are in a barter economy with 2 people(a and b) with 2 goods(x and y). The utility curve is given by Ua and Ub respectively to each consumer.
Ua=min(x,y/2)
Ub=ax+3y
a) Draw the Edgeworth box
b) Explain if consumer a has 40x and 80y is optimal. If not, find the optimal exchange spot.
c) Explain if consumer a has 60x and 80y is optimal. If not, find the optimal exchange spot.
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