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Assume Bruno is a landowner and Angela is the farmer working on his land.
(a) Using Angela and Bruno's feasible frontier and Angela's reservation indifference curve, illustrate the Pareto efficiency curve (contract curve) under bargaining arrangements.
(b) Explain why any allocation on the contract curve shown in part (a) is Pareto efficient. Are all allocations on the contract curve shown in part (a) fair? Why or why not?
(c) On a new diagram illustrate the allocation chosen under coercion (if Angela is a slave of Bruno). Does Angela work more or less hours under these circumstances as compared with bargaining arrangements from part (a)?
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