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In an exchange economy, there are two people, A and B, and two goods, x1 and x2. Their respective utility functions and endowments are: uA
In an exchange economy, there are two people, A and B, and two goods, x1 and x2. Their respective utility functions and endowments are: uA (x4, x4 ) = min(x4, 2x4 } UB ( x], x B ) = xB + xB WA = (8, 17) WB = (8, 0). Note: The As and Bs in the equations above are not powers but rather superscripts to indicate each agent.The minimum and maximum possible amounts of x23 on the contract curve are Minimum x3 = Maximum x3 = The minimum and maximum possible amounts of xi3 on the contract curve are Minimum x3 = Maximum x3 =
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