Only individuals A and B live on a desert island where no production is possible. A is endowed with 12 units of good X and 18 units of good Y. B is endowed with 6 units of good X and 42 units of good Y. In the Edgeworth box, good X is measured on the horizontal axis. Individual A's utility function is
so her MU
X = 3Y and her MU
Y = 3X. Individual B's utility function is UB = 10
so his
and his MU
Y = 5
. Which of the following allocations are on the contract curve?
◦ (X
A = 9, Y
A = 30), (X
B = 9, Y
B = 30)
◦ (X
A = 10, Y
A = 28), (X
B = 8, Y
B = 32)
◦ (X
A = 12, Y
A = 24), (X
B = 6, Y
B = 36)
◦ None of the above.
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