Consumer A has a utility function u(x,y) = xA + yA and an endowment of (x,y)...
Consumer A has a utility function u(x,y) = xA + yA and an
endowment of (x,y) = (25,5). Consumer B has a
utility function u(x,y) = min{xB,yB} and an endowment (x,y) =
(25,45).
a. Carefully sketch the Edgeworth Box and indicate where the
endowment is.
b. What is A’s utility and B’s utility if they each simply consumer
their endowments?
c. Next, add the indifference curve for A and B, through their
endowments in your Edgeworth Box.
d. Find a Pareto Efficient allocation where A receives the same
utility as she gets from her endowment.
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Consumer A has a utility function u(x,y) = xA + yA and an
endowment of (x,y)...
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