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Compute and draw the contract curve

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Reference no: EM132500089

Consider an exchange economy with two goods (x and y) and two agents (a and b). Agent a has preferences represented by ua(xa, ya) =XaYa and endowment (ωxa, ωya) = (2, 3). Agent b has preferences represented by ub(xb,yb) = min{2xb,yb} and endowment (ωxb,ωyb) = (6,1).

(a) Compute and draw the contract curve, the core, and all Walrasian equilibria.

(b) Repeat part (a), but where agent a has preferences represented by max{2xa, ya}.

Reference no: EM132500089

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