Describe the contract curve, i.e., the set of Pareto e¢ cient allocations preferred to the endowment point, graphically in the Edgeworth box.
Ann has utility function uA (xA1; xA2) = xA1 + xA2 over consumption this year (xA1) and consumption next year (xA2), where 2 (0; 1). Bob has utility function uB (xB1; xB2) = ln (xB1) + ln (xB2) over the consumption this year (xB1) and consumption next year (xB2). Ann has $100k this year, but […]


