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What is the equilibrium price ratio

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Question: Suppose there is a pure exchange economy with two goods, A and B. The utility function for consumer i is U(A,B) = A10.5B10.5. The utility function for consumer 2 is U(A,B) = A20.25B20.75. Consumer 1 is endowed with 30 units of A and 70 units of B. Consumer 2 is endowed with 75 units of A and 25 units of B.

a) What is the contract curve?

b) What is the equilibrium price ratio?

c) What is the optimal bundle?

Reference no: EM132131394

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