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PART 1: Consider another pure exchange economy with two consumers, A and B, and two goods, 1 and 2. The initial endowments are A =

PART 1: Consider another pure exchange economy with two consumers, A and B, and two goods, 1 and 2. The initial endowments are A = (0, 1) and B = (1, 0) and the utility functions are uA (Xa) = x1A+ x2A uB (Xb) = min(x1B ,x2B) . Compute the competitive equilibrium and find the contract curve of this economy.

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