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Adrienne and Stephen consume pizza, Z and cola, C. Adrienne's utility function is UA=ZA+CA, and Stephen's is . Their endowments are ZA=10, CA=20, ZS=20, and CS=10.

a. What are the marginal rates of substitution for each person at their endowment point?

b. What is the formula for the contract curve? Draw an Edgeworth box and indicate the contract curve.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M938983

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