Homework Answers
Add Answer to:
3. Xavier and Yvette are the only two persons on a desert island. There are only...
4. Person A and Person B have been stranded on an island. They are the only...
4. Person A and Person B have been stranded on an island. They are the only two people on the island and there are only two goods: coconuts (C) and grapefruits (G). A found (is endowed with) 16 coconuts and 16 grapefruits. B found (is endowed with) 4 coconuts and 144 grapefruits. Therefore, the total endowment for this economy is 20 coconuts and 150 grapefruits. A's marginal rate of substitution between coconuts and grapefruitss MRS here Ca and Ga are...
A two-person economy consists of Ann and Bob. Both of them only consume x and y....
A two-person economy consists of Ann and Bob. Both of them only consume x and y. Ann’s utility over these two goods is UA(xA, yA) = xAy2A and Bob’s utility is UB(xB, yB) = x2ByB. Initially, Ann is endowed with 9 units of x and zero units of y; Bob is endowed with 6 units of y and zero units of x. (a) Write Ann’s marginal rate of substitution in terms of xA and yA and Bob’s marginal rate of...
3. This question is adapted from our textbook. Anne and Bill live in an island economy...
3. This question is adapted from our textbook. Anne and Bill live in an island economy and consume only two goods. Let x? = (x1, xi) denote the consumption bundle for i = A, B. Their endowments are wa = (WA,WA) = (2,5) and wb = (wp,w?) = (10, a). Both have identical Cobb-Douglas utility functions ui(x) = xix, for i = A, B. Normalizing the price of good 2 to be p2 = 1, we just write pı =...
In an exchange economy, there are two people (A and B), and two goods (X and...
In an exchange economy, there are two people (A and B), and two goods (X and Y). The utility functions of A and B are given by UA = XẪYẦ and UB = XểYa. There are 10 units of X and 10 units of Y in total. Which of the following gives a condition for Pareto optimality? 20X 30XA (Continued from previous question) Suppose person A is originally endowed with all 10 units of good X and person B is...
QUESTION-3: Suppose that L two period-lived individuals (1.2) (young, old) are born in period t and...
QUESTION-3: Suppose that L two period-lived individuals (1.2) (young, old) are born in period t and that 1: = (1+n)Le-1- Let utility be logarithmic: u(C1,0, C2,4+1) = In(1.c) + In(C2.6+1). Each individual born at timetis endowed with A units of the economy's single good. The good can be either consumed or stored. Each unit stored yields x>0 units of the good in the following period. Also that in the initial period, period t=0, in addition to the LO young individuals...
This problem illustrates the idea of a competitive equilibrium. Suppose there are only two agents in...
This problem illustrates the idea of a competitive equilibrium. Suppose there are only two agents in the economy, whom we will call Ann and Bob. We can think of this as shorthand for an economy that has many Anns and Bobs, so that each is indeed insignificant in the market. The two people have the following endowments of the two goods they have to consume, bananas and coconuts, as follows: The utility functions are given by: Compute the demand functions...
Consider an exchange economy with two consumers, A and B, who can consume only two goods....
Consider an exchange economy with two consumers, A and B, who can consume only two goods. Suppose consumers’ preferences are represented by a Cobb- Douglas utility function of the form u(x1i,x2i) = x1ix2i (here i is for consumer A or B) for a consumption bundle of two goods (x1i,x2i). The consumers have endowments eA = (e1A;e2A) = (4;1) and eB = (e1B;e2B) = (1;4). The price of good 1 is p1 and the price of good 2 is p2. You...
Anne and Bill are left stranded on a desert island with nothing else but some water...
Anne and Bill are left stranded on a desert island with nothing else but some water x and bread y. There are 100 units available of each good. Suppose that initially Anne has all the water and Bill has all the bread. Anne and Bill have different preferences over the consumption of water and bread. Anne’s utility function is ??(?,?)=? raised 2/5 ? raised3/5, and Bill’s utility function is ??(?,?)=? raised 1/4 ? raised3/4. [30 marks] a) [3 marks] Is...
Charlotte and Wilber are two agents in a two-agent, two-commodity pure exchange economy where apples and...
Charlotte and Wilber are two agents in a two-agent, two-commodity pure exchange economy where apples and bananas are the two commodities. Charlotte loves apples and hates bananas. Her utility function is Ucu, b) = u 5 , where a is the number of apples she consumes and b in the number of bananas she consumes. Wilber likes both apples and bananas. His utility function is Uca, b) = a +2Vb. Charlotte has an initial endowment of no apples and 8...
13. (14pts) An exchange economy with two consumers (A and B) and two goods (1 and 2): Endowments wA= (2/3, 1/3) and...
13. (14pts) An exchange economy with two consumers (A and B) and two goods (1 and 2): Endowments wA= (2/3, 1/3) and w= (1/3, 2/3) Utility functions: u (xf,x4) = xfx4 and u(xf,x) = xfx 1 for normalization. Setting p1 Calculate the competitive equilibrium price, allocations, and utilities for each consumer 1) (2pts) Derive the contract curve and the core path (express x 2) as a function of xf). (2pts) 3) Suppose that we add the third consumer in this...
4. Person A and Person B have been stranded on an island. They are the only two people on the island and there are only two goods: coconuts (C) and grapefruits (G). A found (is endowed with) 16 coconuts and 16 grapefruits. B found (is endowed with) 4 coconuts and 144 grapefruits. Therefore, the total endowment for this economy is 20 coconuts and 150 grapefruits. A's marginal rate of substitution between coconuts and grapefruitss MRS here Ca and Ga are...
3. This question is adapted from our textbook. Anne and Bill live in an island economy and consume only two goods. Let x? = (x1, xi) denote the consumption bundle for i = A, B. Their endowments are wa = (WA,WA) = (2,5) and wb = (wp,w?) = (10, a). Both have identical Cobb-Douglas utility functions ui(x) = xix, for i = A, B. Normalizing the price of good 2 to be p2 = 1, we just write pı =...
In an exchange economy, there are two people (A and B), and two goods (X and Y). The utility functions of A and B are given by UA = XẪYẦ and UB = XểYa. There are 10 units of X and 10 units of Y in total. Which of the following gives a condition for Pareto optimality? 20X 30XA (Continued from previous question) Suppose person A is originally endowed with all 10 units of good X and person B is...
QUESTION-3: Suppose that L two period-lived individuals (1.2) (young, old) are born in period t and that 1: = (1+n)Le-1- Let utility be logarithmic: u(C1,0, C2,4+1) = In(1.c) + In(C2.6+1). Each individual born at timetis endowed with A units of the economy's single good. The good can be either consumed or stored. Each unit stored yields x>0 units of the good in the following period. Also that in the initial period, period t=0, in addition to the LO young individuals...
This problem illustrates the idea of a competitive equilibrium. Suppose there are only two agents in the economy, whom we will call Ann and Bob. We can think of this as shorthand for an economy that has many Anns and Bobs, so that each is indeed insignificant in the market. The two people have the following endowments of the two goods they have to consume, bananas and coconuts, as follows: The utility functions are given by: Compute the demand functions...
Charlotte and Wilber are two agents in a two-agent, two-commodity pure exchange economy where apples and bananas are the two commodities. Charlotte loves apples and hates bananas. Her utility function is Ucu, b) = u 5 , where a is the number of apples she consumes and b in the number of bananas she consumes. Wilber likes both apples and bananas. His utility function is Uca, b) = a +2Vb. Charlotte has an initial endowment of no apples and 8...
13. (14pts) An exchange economy with two consumers (A and B) and two goods (1 and 2): Endowments wA= (2/3, 1/3) and w= (1/3, 2/3) Utility functions: u (xf,x4) = xfx4 and u(xf,x) = xfx 1 for normalization. Setting p1 Calculate the competitive equilibrium price, allocations, and utilities for each consumer 1) (2pts) Derive the contract curve and the core path (express x 2) as a function of xf). (2pts) 3) Suppose that we add the third consumer in this...
Most questions answered within 3 hours.
-
From past history, the scores on a statistics test are normally
distributed with a mean of...
asked 25 minutes ago -
Calculate the gravitational field strength on the highest peak
of Everest (8848 m above the Earth).
asked 25 minutes ago -
the energy value of carbohydrates is 4.0 cal/g. calculate the
energy in 250 g of carbohydrates,...
asked 27 minutes ago -
i
need the summary of this article “Why I Don’t Trust The Video Games
Cause Violence”...
asked 46 minutes ago -
Draw the reactants and products of the following
reaction:
3-ethyl-2-heptene + HOH → 3-ethyl-3-heptanol +
3-ethyl-2-heptanol...
asked 43 minutes ago -
Determine the ratio of adipic acid and butylene glycol that
should be used to obtain a...
asked 53 minutes ago -
Calculate the ratio of the resistance of 11.0 m of aluminum wire
2.5 mm in diameter,...
asked 46 minutes ago -
Kinkaid Co. is incorporated at the beginning of this year and
engages in a number of...
asked 50 minutes ago -
when setting up a simple pendulum, calculate the string length
required for the period to equal...
asked 1 hour ago -
: A small but very close dense mass of 389 kg is brought close
to a...
asked 1 hour ago -
Create a class called Hotel. The hotel class will track the
current reservations for your one-room...
asked 1 hour ago -
In space, a 4.0 kg metal ball moving 30 m/s has a head on
collision with...
asked 1 hour ago