Answered: In an exchange economy, there are two… | bartleby

Microeconomic Theory

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter6: Demand Relationships Among Goods

Section: Chapter Questions

Problem 6.9P

See similar textbooks

Related questions

Question

In an exchange economy, there are two agents, A and B, and there are 330 total units of x and 330 total units of y. The two consumers
have utility functions u(x, y) = x²y and u(x, y) = zy, respectively. The equation of the contract curve in terms of the allocations
of agent A can be written as
УА
330z A
V-ZA
where the value for V is
V
=

Expert Solution

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Blurred answer

Similar questions

16.11. Ted and Joe each consume peaches, x, and plums, y. The consumers have identical 10y7x7, MRS = 10yr^TTogether, they have 10 peaches MRSJoe utility functions, with and 10 plums. Verify whether each of the following allocations is on the contract curve: a) Ted: 8 plums and 9 peaches; Joe: 2 plums and 1 peach. b) Ted: 1 plum and 1 peach; Joe: 9 plums and 9 peaches. %3D
Use the figure below to answer the following question. Point X and Y represent two non-ideal contracts that the individual is faced with buying. From this information, you can conclude the at the individual prefers: Utility A Is у в C E[B, IH point Y- the actuarially fair, but partial contract point Y- the actuarially unfair but full contract point X- the actuarially fair, but partial contract point X- the actuarially unfair but full contract U(I) Nome
Suppose Zaharah (Z) and Quah (Q) are now at an allocation bundle where their marginal rates of substitution (MRS) are given by MRS₂ = 10 and MRSQ = 5, respectively. In general equilibrium analysis, this suggests that Andaikan Zaharah (Z) dan Quah (Q) kini berada pada sesuatu longgok alokasi di mana kadar penggantian marginal (MRS) masing-masing adalah MRS₂ = 10 dan MRSQ = 5. Dalam analisis keseimbangan am, ini menunjukkan bahawa a. both individuals have already engaged in voluntary exchange of resources kedua-dua individu telah pun terlibat dalam pertukaran sumber secara sukarela b. Zaharah's situation is better off than Quah situasi Zaharah adalah lebih baik daripada Quah there exists a basis for voluntary exchange for resources between both terdapat asas untuk pertukaran sumber secara sukarela antara kedua-duanya d. both of them are in equilibrium C.
Use the figure below to answer the following question. Point X and Y represent two non-ideal contracts that the individual is faced with buying. From this information, you can conclude the at the individual prefers: Utility A у в iD 1 с E[B, IH Is point X- the actuarially fair, but partial contract point Y- the actuarially fair, but partial contract point Y- the actuarially unfair but full contract point X- the actuarially unfair but full contract U(I) income
True false question. Can it be efficient for one trader to consume all units of the goods while the other trader consumes nothing? In other words, does this point lie on the contract curve?
Assume that Bob's utility function over beer x and pizza y is U(x,y) = 4x+12y. Which of the following statements is false? %3D O It the price of pizza is 15 and the price of beer is 4, Bob purchases only beer Pizza and beer are perfect substitutes. If the price of pizza is 12 and the price of beer is 3, then we can't determine how much pizza relative to beer Bob purchases. O If the price of pizza is 15 and the price of beer is 5, the own price elasticity of the demand for pizza as well as beer is infinite. O If the price of pizza is 16 and the price of beer is 5, then Bob only purchases pizza.
I like drinking Smirnoff and Stoli Vodka, but I really only careabout the total amount of alcohol I get out of it. They areperfect substitutes. Smirnoff is sold in liter bottles that are100 proof (that’s 50% alcohol). Stoli is sold in liter bottlesthat are 80 proof (40% alcohol). What is my utility functionfor bundles of these two vodkas? What do my indifferencecurves look like?
Throughout this problem set, we will look at exchange economies with two goods and two agents. Let X = R², let u denote agent i's utility, and let wie X denote agent i's endowment. 1. Suppose u¹(x¹) = min{ri, 2} and wi = (4,8) for both agents i. (a) Argue that every Pareto optimal allocation has r≥r for both agents i. (b) Argue that every allocation z with r≥r for both agents i is Pareto optimal. (c) Draw an Edgeworth box, with a picture depicting every Pareto-optimal allocation. In this picture, also draw the endowment allocation, and draw each agent's indifference curve through the endowment. (d) Argue that, in any competitive equilibrium, the price of good 2 must be zero. (e) Find all competitive equilibria.
Anya is awake for 100 hours per week. Using onediagram, show Anya’s budget constraints if sheearns $12 per hour, $16 per hour, and $20 per hour.Now draw indifference curves such that Anya’slabor-supply curve is upward-sloping whenthe wage is between $12 and $16 per hour andbackward-sloping when the wage is between $16and $20 per hour
When the prices of goods x and y were €2 per unit of either good, a consumer spent all his monetary income to buy 20 units of x and 60 units of y. When the price of y increased to €4 per unit, the substitution effect would lead her to choose 60 units of x and 30 units of y. Should this person be paid a €80 compensation, she would feel as good as before the price change. True or false, explain. fr lite als s della Luchass
4. a. Consider a consumer with preferences defined over x and y. Demonstrate that it is possible theywould choose to consume some of both commodities when their income is I but would choose toconsume only x when their income is I’ > I. (Remember: if you can draw it without violating anyof the basic assumptions on preferences, it could happen.) b. Conversely, demonstrate that it is possible they would choose to consume only x when theirincome is I but would choose to consume x and y when their income is I’ > I.c. Finally, show it is possible that they would choose to consume only y when their income is I butwould choose to consume only x when their income is I’ > I.
Guerdon always puts half a sliced banana, q, , on his bowl of cereal, q, The two 14 goods are perfect complements. What is his utility function? Derive his demand curve for bananas graphically and mathematically. 12- 10- e, Guerdon's utility function (as a function of q, and q2) is 6- VA U= min/2q1.92} 4- O B. U=q, +92- 2- 0+ OC. U=29, + q92- 10 12 14 16 18 20 6 22 Bananas O D. U=0.5q1 + q2- OE. U=q, xq2- 5.00- 4.50- Guerdon's demand function for bananas (as a function of the price of bananas, P1. the price of a bowl of cereal, p2, and income, Y) is 4,00- 3.50- 91 = (p1 + 2p2) (Properly format your expression using the tools in the E 3.00 palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the_ character.) 2.50- * 2.00- P. 1.50- 1.00- 0.50- 0.00+ 10 12 14 Bananas tv 80 DI DD F1 F3 F4 F5 F6 F7 F8 F10 @ %23 $ & 1 3 4 7 Q W E Y U S F H. J く C V M option command command optic ーの * CO Cereal (bowls) p. S per banana B * * N A

SEE MORE QUESTIONS

Recommended textbooks for you

Microeconomic Theory

Microeconomic Theory

Economics

ISBN:

9781337517942

Author:

NICHOLSON

Publisher:

Cengage

Principles of Economics 2e

Principles of Economics 2e

Economics

ISBN:

9781947172364

Author:

Steven A. Greenlaw; David Shapiro

Publisher:

OpenStax

Microeconomic Theory

Microeconomic Theory

Economics

ISBN:

9781337517942

Author:

NICHOLSON

Publisher:

Cengage

Principles of Economics 2e

Principles of Economics 2e

Economics

ISBN:

9781947172364

Author:

Steven A. Greenlaw; David Shapiro

Publisher:

OpenStax

SEE MORE TEXTBOOKS