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Question: a) Let's suppose we are in an exchange economy with two agents, with a contract curve going through the point (4,8). The Edgeworth box is a square, and utility functions of agents A and B are such as u(ax,ay) = a*u(x,y) what will be the form of the contract curve?
b) Does it remain the same if we change the total endowments of goods X and Y? Why?
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Many businesses use any of the following approaches to help analyze consumer behavior:
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