An exchange economy has a total endowment w = (100, 150). Agent A has symmetric perfect...

Transcribed Image Text:

An exchange economy has a total endowment w = (100, 150). Agent A has symmetric perfect complement utility u^(x^) = min{x^, x^^} while agent B has some Cobb-Douglas utility. (a) Solve for all interior points of the contract curve. (b) Argue that the upper right corner of the Edgeworth Box is also in fact part of the contract curve in this economy. (c) Graph the Edgeworth Box and the entire contract curve. An exchange economy has a total endowment w = (100, 150). Agent A has symmetric perfect complement utility u^(x^) = min{x^, x^^} while agent B has some Cobb-Douglas utility. (a) Solve for all interior points of the contract curve. (b) Argue that the upper right corner of the Edgeworth Box is also in fact part of the contract curve in this economy. (c) Graph the Edgeworth Box and the entire contract curve.