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The utility functions of Alice and Bob in the pure exchange economy are u A = x 1 3 x 2 and u B =
The utility functions of Alice and Bob in the pure exchange economy are uA=x13x2 and uB=x1x23 . And the holding resources are eA=(1,3),eB=(3,1) .
Derive the Walrasian equilibrium.
Derive the Pareto-efficient allocations and plot them in the Edgeworth box.
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