Andrew and Sarah are two traders in a pure exchange economy with two goods,Bikes and TVs.Suppose Andrew has preferences given by:
U(B,T)= BT
where B is the number of bikes and T is the number of TVs.Sarah only derives utility from TV,so her utility function can be given by:
V(B,T)= T
Describe the contract curve.

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The Answer of Andrew and Sarah are two traders in a pure exchange economy with two goods,Bikes and TVs.Suppose Andrew has preferences given by:
U(B,T)= BT
where B is the number of bikes and T is the number of TVs.Sarah only derives utility from TV,so her utility function can be given by:
V(B,T)= T
Describe the contract curve.

Andrew and Sarah Are Two Traders in a Pure Exchange