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Matt and Bella each have an initial endowment of good X and good Y. Matt's utility function is UM = XM 0.5YM 0.5 and
Matt and Bella each have an initial endowment of good X and good Y. Matt's utility function is UM = XM 0.5YM 0.5 and Bella's utility function is UB = 2XB+ YB. What is the formula for the contract curve? Assume good x is on the x-axis and good Y is on the y-axis. Hint: your answer should be in terms of XM and YM.
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The contract curve is the set of all Pareto optimal allocations in an exchange economy A Pareto opti...
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Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
