26. In an exchange economy there are two people (A and B), and two goods (x₁ and 2₂). Their respective utility functions and endowments are: UA (x₁, x²) = x₁ + 2x^, U³ (x³, x²) = 2x³ + x², w₁ = = (1,1), (1,1). What are the minimum and maximum possible amounts of r on the contract curve? WB = 27. (continues using scenario from previous question) What are the minimum and maximum possible amounts of x in the core? 28. (continues using scenario from previous question) Are the core and the contract curve identical in this particular example?

26. In an exchange economy there are two people (A and B), and two goods (x₁ and 2₂). Their respective utility functions and endowments are: UA (x₁, x²) = x₁ + 2x^, U³ (x³, x²) = 2x³ + x², w₁ = = (1,1), (1,1). What are the minimum and maximum possible amounts of r on the contract curve? WB = 27. (continues using scenario from previous question) What are the minimum and maximum possible amounts of x in the core? 28. (continues using scenario from previous question) Are the core and the contract curve identical in this particular example?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter4: Prices: Free, Controlled, And Relative

Section: Chapter Questions

Problem 7QP

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