In a pure exchange economy with two goods, G and H, the two traders have Cobb-Douglas utility functions. Amos' utility is Ua= (Ga )^∝ (H∝)^(1-∝) and Elise’s is Ue= (Ge)^β (He)^(1-β). What are their marginal rates of substitution? Between them, Amos and Elise own 100 units of G and 50 units of H. Thus, If Amos has Ga and Ha, Elise has Ge =100-Ga and He =50-Ha. Solve for their contract curve.



Solve for their contract curve. Show all your calculations clearly from your marginal utilities.