In an exchange economy A's utility is given by U_A = x + y And B's by U_B = min[x,2y]. The initial endowment for A is x = 10 y = 8 and for B,x = 8 y = 4.To reach the contact curve,these individuals must A)Trade 1x for 1y. B)Trade 2x for 1 y. C)Trade 1x for 2y. D)Do nothing,since they are already on the contract curve.

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The Answer of In an exchange economy A's utility is given by U_A = x + y And B's by U_B = min[x,2y]. The initial endowment for A is x = 10 y = 8 and for B,x = 8 y = 4.To reach the contact curve,these individuals must A)Trade 1x for 1y. B)Trade 2x for 1 y. C)Trade 1x for 2y. D)Do nothing,since they are already on the contract curve.

In an Exchange Economy A's Utility Is Given by UA

In an Exchange Economy A's Utility Is Given by U_A