Question

3. Suppose there are two consumers, A and B. The utility functions of each consumer are given by: Up(X,Y) = X + 2Y The initial endowments are: A:X=2; Y = 8 a) Using an Edgeworth Box, graph the initial allocation (label it W) and draw the indifference curve for each consumer that runs through the initial allocation. Be sure to label your graph carefully and accurately. b) What is the marginal rate of substitution for consumer A at the initial allocation? e) What is the marginal rate of substitution for consumer B at the initial allocation? d) Is the initial allocation Pareto Efficient?

0 0
Add a comment Improve this question Transcribed image text
Request Professional Answer

Request Answer!

We need at least 10 more requests to produce the answer.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
3. Suppose there are two consumers, A and B. The utility functions of each consumer are...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT