Suppose We Live in an Exchange Economy with Two Goods $u \left( x _ { 1 } , x _ { 2 } \right) = x _ { 2 } + 50 \ln x _ { 1 }$

question 19

Essay

Suppose we live in an exchange economy with two goods.Together,we own 300 of good 1 and 300 of good 2.My tastes are captured by the utility function $u \left( x _ { 1 } , x _ { 2 } \right) = x _ { 2 } + 50 \ln x _ { 1 }$ and yours are captured by the utility function $u \left( x _ { 1 } , x _ { 2 } \right) = x _ { 2 } + 100 \ln x _ { 1 }$ .
a.Calculate the portion of the contract curve that lies in the interior of the Edgeworth Box.
b.Can you make intuitive sense of your answer?

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Definitions:

DMM Probes

Tools used with a digital multimeter to make physical contact with the component or circuit being measured.

Rubber Insulator

A component made of rubber used to electrically isolate two parts of a structure, preventing unwanted electrical conduction.

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To discover or identify the presence or existence of a particular object, condition, or substance often through observation or using specialized equipment.