This seems to be a last minute, asinine doubt. Please help.
If in an exchange economy, the two consumers have the utility function of the type- Xi + Yi, i =1,2
then all the allocations in the box are pareto optimal. What about the case when the have different MRS.
The contract curve is usually the x axis for consumer 1 and y axis for consumer 2. Does this hold for both the cases - MRS 1 < MRS 2, and MRS 1>MRS2 ?
Also can some one tell how to find the competitive equilibrium in case of two perfect substitutes. Thanks :)