Isi 2008.. Contract curve

[Spiti]

What is the answer for (c)? Is it Yb=0 line ?

[phelps.phan]

I guess Ya=0

[Spiti]

I was confused between Ya=0 and Yb=0. Can you explain why not Yb=0

[phelps.phan]

See utility of A is Xa. He does not care about Y that he has. We can assume it to be a neutral good. So his consumption will always be in the border of the edgeworth box (eqn. Ya=0). And B has concave utility. He'll spend his entire income in either of the good. So for equilibrium to be in place he will be consuming entire Y. So Yb cannot be 0. Thats my reasoning. I'm not sure though.

[Spiti]

Thanks