Question
In: Economics
Consider a 2x2 pure exchange Edgeworth box economy model where each individual has preferences given by...
Consider a 2x2 pure exchange Edgeworth box economy model where each individual has preferences given by U(x, y) = sqrt(xy)
Consumer A is endowed with 1 unit of x and 2 units of y. Consumer B is endowed with 3 units of x and 1 unit of y. What is the ratio of the price of prices, Px/Py, that will clear both markets when the consumers individually solve the UMP?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Consider a 2x2 pure exchange Edgeworth box economy. Consumer A’s preferences are given by Ua(x, y)...
Consider a 2x2 pure exchange Edgeworth box economy. Consumer A’s
preferences are given by Ua(x, y) = min(x, y)
Consumer B’s preferences are given by Ub(x, y) = y + x
Both consumers are endowed with 1 unit of x and 2 units of
y.
Which of the following identifies the set of Pareto efficient
allocations that are feasible given the dimensions of the Edgeworth
box?
Yb = Xb
The set of points where Ya = Xa as well as...
Consider a 2x2 pure exchange Edgeworth box economy. Each consumer is endowed with two units of...
Consider a 2x2 pure exchange Edgeworth box economy. Each
consumer is endowed with two units of x and one unit of y. Consumer
A has (strictly) monotonic preferences over good x and is otherwise
indifferent between any levels of good y. The preferences for
consumer B are given by Ub(x, y) = x + 2y. What ratio of prices
Px/Py will clear both markets?
Consider a 2x2 exchange economy where the two individuals A and B engaged in the exchange...
Consider a 2x2 exchange economy where the two individuals A and
B engaged in the exchange of the two goods x and y have utility
functions U A = x A − y A − 1 and U B = y B − x B − 1,
respectively. The individuals' endowments are { ( w A x , w A y ) ,
( w B x , w B y ) } = { ( 5 , 10 )...
For 2x2 pure exchange economies, assume both preferences are homothetic, also assume smooth and quasiconcave utility...
For 2x2 pure exchange economies, assume both preferences are
homothetic, also assume smooth and quasiconcave utility functions
(so preferences are convex). Assume also that the locus of
efficient allocations is a continuous curve connecting the two
endpoints of the main diagonal in the Edgeworth box.
Show that all efficient allocations lie on the same side of the
main diagonal in the Edgeworth box.
What if both preferences are identical?
Thank you!
Consider a pure-exchange economy, with two consumers and two commodities. Initial endowments are given by w1...
Consider a pure-exchange economy, with two consumers and two
commodities. Initial endowments are given by w1 = (4, 2) and w2 =
(2, 3). Individual utility functions are u1(x11, x21) = x11 · x21
and u2(x12, x22) = x12 + x22. Find the competitive equilibrium.
Consider an individual with preferences defined over two goods, X1 and X2. This individual has preferences...
Consider an individual with preferences defined over two
goods, X1 and X2. This individual has preferences that can be
represented by the following utility function: u(X1, X2) = X1 + X
0.5 2 Let P1 = 4 and P2 = 2. In addition, suppose this individual
has an income of $120.
(a) Write down the expression for this consumer’s marginal
rate of substitution of X1 for X2 (MRS12). Identify the
distinguishing feature of this particular MRS12.
(b) Calculate the optimal...
Consider a pure exchange economy with 2 goods and 3 agents. Goody is the numeraire,...
Consider a pure exchange economy with 2 goods and 3 agents. Good
y is the numeraire, so we set py = 1. • Mr. 1 is Cobb-Douglas of
type λ = 0.25 and is endowed with (10, 4). • Mr. 2 is Cobb-Douglas
of type λ = 0.5 and is endowed with (5, 9). • Mr. 3 is Cobb-Douglas
of type λ = 0.75 and is endowed with (20, 20). In the following
steps, you will find the equilibrium of...
Consider a pure exchange economy with two consumers, Ann (A) and Bob (B), and two commodities,...
Consider a pure exchange economy with two consumers, Ann (A) and
Bob (B), and two commodities, 1 and 2, denoted by (x^A_1, x^A_2)
and (x^B_1, x^B_2). Ann’s initial endowment consists of 5 units of
good 1 and 10 units of good 2. Bob’s initial endowment consists of
10 unit of good 1 and 5 units of good 2. The consumers’ preferences
are represented by the following utility functions:U^A(x^A_1,
x^A_2) =min{x^A_1, x^A_2} and U^A(x^B_1, x^B_2)= =min{x^B_1,
x^B_2}. Denote by p1 and...
Consider a pure exchange economy with two consumers, Ann (A) and Bob (B), and two commodities,...
Consider a pure exchange economy with two consumers, Ann (A) and
Bob (B), and two commodities, 1 and 2, denoted by (x^A_1 , x^A_2 )
and (x^B_1 , x^B_2 ). Ann’s initial endowment consists of 15 units
of good 1 and 5 units of good 2. Bob’s initial endowment consists
of 5 unit of good 1 and 5 units of good 2. The consumers’
preferences are represented by the following Cobb-Douglas utility
functions: U^A(x^A_1 , x^A_2 ) = (x^A_1 )^2...
Consider a pure exchange economy with 2 goods and 3 agents. Good y is the numeraire,...
Consider a pure exchange economy with 2 goods and 3 agents. Good
y is the numeraire, so we set py = 1. • Mr. 1 is Cobb-Douglas of
type λ = 0.25 and is endowed with (10, 4). • Mr. 2 is Cobb-Douglas
of type λ = 0.5 and is endowed with (5, 9). • Mr. 3 is Cobb-Douglas
of type λ = 0.75 and is endowed with (20, 20). In the following
steps, you will find the equilibrium of...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 1. Given the following information, determine the beta coefficient for Stock L that is consistent with...
- Generate the first ten rows of Pascal triangle using MATLAB. Post code in the response
- Describe “downsizing” and explain the use of “ombudspersons” and “alternative dispute” resolution. Give some incidents and...
- You are the chairman of the board of directors for an innovative technology company, and you...
- Describe how common law has influenced the development of health care in the 21st century. Provide...
- 1. For each of the following lists, perform a bubble sort, and show the list after...
- Task 3: Research Project (5 marks) You’re investigating a case involving a 2 GB drive that...
ADVERTISEMENT