Question

) 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.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
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 y...
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 Calculate the utility level before and after trading. initial endowments ωa=(4,5) and wb=(3,2)
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...
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
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...
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...
UA = ?^1/2?^1/4 and (??x, ??y) = (90,30) UB = ?1/2?^1/4 and (??x, ??y) = (10,50)...
UA = ?^1/2?^1/4 and (??x, ??y) = (90,30) UB = ?1/2?^1/4 and (??x, ??y) = (10,50) For each of the above economies a) Derive the contract curve. b) Find the competitive equilibrium price ratio and allocation. c) Use an Edgeworth box to illustrate the competitive equilibrium
Consider the following utility functions over goods X and Y for two individuals: Daves utility function...
Consider the following utility functions over goods X and Y for two individuals: Daves utility function : Ud(x,y) = 6min(x,y) Jess's Utility function is Uj (x,y) = 6x + 3Y Draw Daves indifference curve map for two specific utility levels: U= 6 and U = 12 Draw Jess indifference curve map for two seperate utility levels: U=6 and U=12 Explain the preferences between the two What is the MRS for Dave? and for Jess?
Let Ella’s preferences for goods x and y are represented by the utility function ?(E) (?,...
Let Ella’s preferences for goods x and y are represented by the utility function ?(E) (?, ?) = 2? + ?, whereas Louis’ utility function is ?(L) (?, ?) = ? + ? The initial endowments of Ella and Louis include 8 units of x and 4 units of y each (i.e., there are a total of 16 units of x and 8 units of y in this economy). a. (2 points) What are the marginal rates of substitution for...
4: There is an exchange economy with two agents, A, B, and two goods,  x, y. A's...
4: There is an exchange economy with two agents, A, B, and two goods,  x, y. A's endowment is x = 6, y = 4, and B's endowment is x = 4, y = 6. (a) A has the utility function  u(x, y) = x + y  and B u(x, y) = xy. Find a competitive equilibrium allocation (CEA) and associated equilibrium prices. What difference would it make if A's endowment is x = 3, y = 1, and B's endowment is x...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT