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In a pure exchange economy with two goods, G and H, the two traders have Cobb-Douglas utility functions. Ama's utility is = 1 and Esi's
In a pure exchange economy with two goods, G and H, the two traders have Cobb-Douglas utility functions. Ama's utility is = 1 and Esi's is = 1 . a. What are their marginal rates of substitution? b. Between them, Ama and Esi own 100 units of G and 50 units of H. Thus, if Ama has and , Esi has = 100 - and = 50 - . Solve for their contract curve. c. Solve for the contract curve if =
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