2) For two agents, a and b, with the following
utility functions over goods x and...
2) For two agents, a and b, with the following
utility functions over goods x and y (6)
ua=ua(xa,ya)=xaya
ub=ub(xb,yb)=xbyb
a) Determine the slope of the contract curve in the interior of
an Edgeworth box that would show this two-person two-goods
situation.
b) For initial endowments ωa=(12,7) and ωb=(9,10), what is the
Walras allocation between the two agents a and b?
(Remember that it is the relative price of the goods that matters
in this consideration. Also remember that all...
) For two agents, a and b, with the following
utility functions over goods x and...
) For two agents, a and b, with the following
utility functions over goods x and y (6)
ua= ua(xa,ya)=xa^1/4 ya^3/4
ub=ub (xb,yb) = xb^1/2 yb^1/2
Determine the slope of the contract curve in the interior of an
Edgeworth box that would show this two-person two-goods
situation.
Alice (A) and Bob (B) have an endowment of goods xx and yy, with
Alice's endowment...
Alice (A) and Bob (B) have an endowment of goods xx and yy, with
Alice's endowment being (ωxA,ωyA)=(3,6)(ωAx,ωAy)=(3,6) and Bob's
endowment
equals (ωxB,ωyB)=(3,9)(ωBx,ωBy)=(3,9). Alice's
utility is given by uA(xA,yA)=x2AyAuA(xA,yA)=xA2yA, while Bob's
utility is uB(xB,yB)=xBy2BuB(xB,yB)=xByB2. Find the competitive
equilibrium.
Select one:
a. xA=26/7,yA=13/3,xB=16/7,yB=32/3,px/py=14/6xA=26/7,yA=13/3,xB=16/7,yB=32/3,px/py=14/6
b. xA=16/7,yA=13/3,xB=26/7,yB=32/3,px/py=3/7xA=16/7,yA=13/3,xB=26/7,yB=32/3,px/py=3/7
c. xA=16/7,yA=32/3,xB=26/7,yB=13/3,px/py=7/3xA=16/7,yA=32/3,xB=26/7,yB=13/3,px/py=7/3
d. xA=26/7,yA=13/3,xB=16/7,yB=32/3,px/py=3/7
Cali and David both collect stamps (x) and fancy spoons (y).
They have the following preferences...
Cali and David both collect stamps (x) and fancy spoons (y).
They have the following preferences and endowments.
Uc (x, y) =
xc.yc2
ωc = (10, 5.2)
UD (x, y) = xD.
yD
ωD = (14, 6.8)
Write down the resource constraints and draw an Edgeworth box
that shows the set of feasible allocations.
Label the current allocation inside the box. How much utility
does each person have?
Show that the current allocation of stamps and fancy spoons is
not...
Please solve all the parts.Thank you.
A consumer can spend her income on two products, good...
Please solve all the parts.Thank you.
A consumer can spend her income on two products, good X and good
Y . The consumer’s tastes are represented by the utility function
U(x, y) = xy.
a. Suppose that Px = 4 and Py = 1, and I = 16.
Draw the budget line and mark it as BL1. Initial optimum is at A.
Find the optimal amounts, xA and yA and locate A on the graph. Find
the initial level of...
Consider an exchange economy with two consumers A and B, and teo
goods X and Y....
Consider an exchange economy with two consumers A and B, and teo
goods X and Y.
A's utility function is Ua=X^(1/3)Y^(2/3) and B's utility
function is Ub=X^(2/3)Y^(1/3).
Initial endowments for A are (18,4) and for B are (2,6).
Q. Suppose that B realizes he has market power and hence
optimizes by controlling price. Individual A behaves as price
taker. Formulate the optimization problem of individual B and solve
the equilibrium.
Which of the following utility functions is quasi-linear?
ux,y=Min(xa,yb)
ux,y=Max(xa,yb)
ux,y=x+y
ux,y=xayb
All of the above...
Which of the following utility functions is quasi-linear?
ux,y=Min(xa,yb)
ux,y=Max(xa,yb)
ux,y=x+y
ux,y=xayb
All of the above
None of the above
A consumer’s preferences are represented by the following
utility function: u(x, y) = lnx + 1/2...
A consumer’s preferences are represented by the following
utility function: u(x, y) = lnx + 1/2 lny
1. Recall that for any two bundles A and B the following
equivalence then holds
A ≽ B ⇔ u(A) ≥ u (B)
Which of the two bundles (xA,yA) = (1,9) or (xB,yB) = (9,1) does
the consumer prefer?
Take as given for now that this utility function represents a
consumer with convex preferences. Also remember that preferences ≽
are convex when for...
Suppose there are two consumers, A and B. The utility functions
of each consumer are given...
Suppose there are two consumers, A and B. The utility functions
of each consumer are given by: UA(X,Y) = X2Y UB(X,Y) = X*Y
Therefore: For consumer A: MUX = 2XY; MUY = X2 For consumer B: MUX
= Y; MUY = X The initial endowments are: A: X = 120; Y = 6 B: X =
30; Y = 14 a) (20 points) Suppose the price of Y, PY = 1. Calculate
the price of X, PX that will lead...
1. Suppose there are two consumers, A and B. The utility
functions of each consumer are...
1. Suppose there are two consumers, A and B. The utility
functions of each consumer are given by: UA(X,Y) = X*Y UB(X,Y) =
X*Y3 Therefore: • For consumer A: MUX = Y; MUY = X • For consumer
B: MUX = Y3; MUY = 3XY2 The initial endowments are: A: X = 10; Y =
6 B: X = 14; Y = 19 a) (40 points) Suppose the price of Y, PY = 1.
Calculate the price of X, PX...