Question: Help fast The two agents, A and B, in a two-commodity exchange economy have utility functions 3/4.,1/4 LA = XA YA and up = X
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The two agents, A and B, in a two-commodity exchange economy have utility functions 3/4.,1/4 LA = XA YA and up = X yB 1/2.,1/2 Their initial endowments are @= (10,20) and @; = (30,40). [a) Determine and draw the set of Pareto efficient allocations in an Edgeworth box for this economy. (b) Verify the implementation of Walras law for this economy. (c) What is the equilibrium allocation? Will the equilibrium allocation be Pareto-optimal? (d) Consider the allocation (f, = 30, ), = 30, & = 10,), = 30). Can this allocation be obtained as a price equilibrium with transfers? If so, compute corresponding prices and the transfers T, and T#, with TA + Ty = 0
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