Laffer curve dinner meeting at the Two Continents Restaurant in the Washington Hotel with Arthur Laffer, Wanniski, Dick Cheney, Donald Rumsfeld, and his deputy press secretary Grace-Marie Arnett. In this meeting, Laffer, arguing against President Gerald Ford's tax increase, reportedly sketched the curve on a napkin to illustrate the concept. Cheney did not accept the idea immediately, but it caught the imaginations of those present. Laffer professes no recollection of this napkin, but writes: "I used the so-called Laffer Curve all the time in my classes and with anyone else who would listen to me". There are historical precedents other than those
Contract curve the initial allocations. The analysis cannot say which particular point along the contract curve they will end up at — this depends on the two people's bargaining skills. In the case of two goods and two individuals, the contract curve can be found as follows. Here formula_1 refers to the final amount of good 2 allocated to person 1, etc., formula_2 and formula_3 refer to the final levels of utility experienced by person 1 and person 2 respectively, formula_4 refers to the level of utility that person 2 would receive from the initial allocation without trading at all, and formula_5