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9. Consider an exchange economy, consisting of two consumers, denoted by i = A, B, who trade two commodities, denoted by j = 1,2. (a) Assuming that consumers A and B's endowments are e₁ = (1,2) and eB (2, 1) respectively, construct the Edgeworth Box diagram relative to this econ- omy. With reference to the same economy, define the following notions: com- petitive equilibrium, Pareto-efficient allocation, contract curve.

9. Consider an exchange economy, consisting of two consumers, denoted by i = A, B, who trade two commodities, denoted by j = 1,2. (a) Assuming that consumers A and B's endowments are e₁ = (1,2) and eB (2, 1) respectively, construct the Edgeworth Box diagram relative to this econ- omy. With reference to the same economy, define the following notions: com- petitive equilibrium, Pareto-efficient allocation, contract curve.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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9. Consider an exchange economy, consisting of two consumers, denoted by i = A, B, who trade two commodities, denoted by j = 1,2. (a) Assuming that consumers A and B's endowments are e₁ = (1,2) and eB (2, 1) respectively, construct the Edgeworth Box diagram relative to this econ- omy. With reference to the same economy, define the following notions: com- petitive equilibrium, Pareto-efficient allocation, contract curve.
Transcribed Image Text:9. Consider an exchange economy, consisting of two consumers, denoted by i = A, B, who trade two commodities, denoted by j = 1,2. (a) Assuming that consumers A and B's endowments are e₁ = (1,2) and eB (2, 1) respectively, construct the Edgeworth Box diagram relative to this econ- omy. With reference to the same economy, define the following notions: com- petitive equilibrium, Pareto-efficient allocation, contract curve.
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