There could be other questions related to this Economy. Consider a two-person (1 and 2) two...

 

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There could be other questions related to this Economy. Consider a two-person (1 and 2) two good (X and Y) exchange economy. Call this economy "Economy 2". The utility function of person 1 and the utility function of person 2 are given respectively by U₁ = x₁ + 0.4 y₁ and U_2= min(x2, 0.4 y2) where x; and yi denote respectively person is the consumption amount of good X and good Y, i=1, 2. Suppose the economy has a total of 206 units of good X and 98 units of good Y. Derive the equation of the economy's contract curve and use it to answer the following. If we give person 2 an amount of 57 units of good X, how many units of good Y must person 1 receive in order for the allocation to be efficient? There could be other questions related to this Economy. Consider a two-person (1 and 2) two good (X and Y) exchange economy. Call this economy "Economy 2". The utility function of person 1 and the utility function of person 2 are given respectively by U₁ = x₁ + 0.4 y₁ and U_2= min(x2, 0.4 y2) where x; and yi denote respectively person is the consumption amount of good X and good Y, i=1, 2. Suppose the economy has a total of 206 units of good X and 98 units of good Y. Derive the equation of the economy's contract curve and use it to answer the following. If we give person 2 an amount of 57 units of good X, how many units of good Y must person 1 receive in order for the allocation to be efficient?

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The equation of the economys contract curve is given ... View the full answer