Andrew and Sarah Are Two Traders in a Pure Exchange

question 90

Essay

Andrew and Sarah are two traders in a pure exchange economy with two goods,Bikes and TVs.Suppose Andrew has preferences given by:
U(B,T)= BT
where B is the number of bikes and T is the number of TVs.Sarah only derives utility from TV,so her utility function can be given by:
V(B,T)= T
Describe the contract curve.

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Definitions:

Superior

Describing someone or something with higher rank, quality, or importance compared to others.

Uniqueness

The state or fact of being unlike anything else of its kind, particularly in being the only one.

Self-Image

An individual's view of themselves, encompassing perceptions of one's physical, social, and intellectual attributes.

Unrealistic Self-Appraisal

A distorted evaluation of one's abilities, characteristics, or performance that does not align with objective reality.