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1
vote
Accepted
Edgeworth Box for exchange economy
Not quite. The line you have drawn turns out to be the contract curve, but from this figure it's not clear how you get this line, because the indifference curves for the two utility functions are miss …
0
votes
Accepted
How to find the Utility Possibility Frontier when there are Perfect Substitutes?
In addition to the solution worked out in the comments, there's also a faster way to find the welfare maximizing distribution:
Note that social welfare can also be written in terms of $x_{1A}$ and $x …
2
votes
Edgeworth Box (Non-Convex preference)
If total endowments are $(\bar x,\bar y)$ and $A$ has utility function $u_A(x_A,y_A)$, then $B$'s utility function $u_B(x_B,y_B)\equiv -u_A(\bar x-x_B,\bar y-y_B)$ has the same indifference curves as …