Description

A graduate-level worked problem. 'In an Edgeworth Box: Agent A has utility U_A = x_A × y_A. Agent B has utility U_B = x_B × y_B. Endowments: A=(10,2), B=(2,10). Total: x=12, y=12.' Step 1: Find MRS for each agent. MRS_A = y_A/x_A = 2/10 = 0.2. MRS_B = y_B/x_B = 10/2 = 5. Step 2: At initial endowment

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