so below is the question..and while i want the answers i want someone to step by step explain how they arrive at each answer cause i am lost i believe that for part A that i am suppose to differentiate what i got to find marginal utility but i am not completely sure.
4.Suppose there are two traders (A and B) and two goods (x and y) with initial allocations . The utility function of trader A is and the utility function of trader B is .
a.Using marginal utilities, derive each trader’s marginal rate of substitution of x for y.
b.What is the equation of the contract curve given their endowments?
c.Calculate a competitive equilibrium for this trading problem.
4.Suppose there are two traders (A and B) and two goods (x and y) with initial allocations . The utility function of trader A is and the utility function of trader B is .
a.Using marginal utilities, derive each trader’s marginal rate of substitution of x for y.
b.What is the equation of the contract curve given their endowments?
c.Calculate a competitive equilibrium for this trading problem.