Suppose there is a pure exchange economy with two goods a, Microeconomics

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Suppose there is a pure exchange economy with two goods a

Question: Suppose there is a pure exchange economy with two goods, A and B. The utility function for consumer i is U(A,B) = A₁^0.5B₁^0.5. The utility function for consumer 2 is U(A,B) = A₂^0.25B₂^0.75. Consumer 1 is endowed with 30 units of A and 70 units of B. Consumer 2 is endowed with 75 units of A and 25 units of B.

a) What is the contract curve?

b) What is the equilibrium price ratio?

c) What is the optimal bundle?

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Microeconomics: Suppose there is a pure exchange economy with two goods a

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Microeconomics: Suppose there is a pure exchange economy with two goods a

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