Answering only first question ( 2) with all parts
2. For the following economies find the set of all efficient allocations: (a) Preferences are u'(x1, x2) = min{x\,...
Find the Walrasian Equilibrium price and allocations for all the economies : (1) Utilities are u1(x1,x2) = min(x1,x2), u2(x1,x2) = min(x1,x2). The endowment is e1 = (5,6) and e2 = (15,4) (2) Utilities are u1(x1,x2) = max(x1,x2), u2(x1,x2) = min(x1,x2). The endowment is e1 = (5,6) and e2 = (15,4)
2. (25%) Consider a consumer with preferences represented by the utility function: u(x1, x2) = min {axı, bx2} If the income of the consumer is w > 0 and the prices are p1 > 0 and P2 > 0. (a) Derive the Marshallian demands. Be sure to show all your work. (b) Derive the indirect utility function. (c) Does the utility function: û(x1, x2) = axı + bx2 represent the same preferences?
1. Consider the utility function: u(x1,x2) = x1 + x2. Find the corresponding Hicksian demand function. 2. For each of the three utility functions below, find the substitution effect, the income effect, and the total effect that result when prices change from p = (2,1) to p' = (2,4). Assume the consumer has income I = 20. (a) Before doing any calculation, make an educated guess about the relative magnitude of the three substitution effects and the three income effects...
1 pts Question 2 A consumer has preferences represented by the utility function: u(x1, x2)= x x Market prices are pi = 3 and P2 = 4. The consumer has an income m 30. Find an expression for the consumer's Engel curve for good 1. x1(m). ооо D Question 3 1 pts
(5) Let X1,X2,,Xn be independent identically distributed (i.i.d.) random variables from 1.1 U(0,1). Denote V max{Xi,..., Xn) and W min{Xi,..., Xn] (a) Find the distributions and the densities and the distributions of each of V and W. (b) Find E(V) and E(W) (5) Let X1,X2,,Xn be independent identically distributed (i.i.d.) random variables from 1.1 U(0,1). Denote V max{Xi,..., Xn) and W min{Xi,..., Xn] (a) Find the distributions and the densities and the distributions of each of V and W. (b)...
1. Consider the utility function: u(x1,x2) = x1 + x2. Find the corresponding Hicksian demand function. 2. For each of the three utility functions below, find the substitution effect, the income effect, and the total effect that result when prices change from p =(2, 1) to p' = (2,4). Assume the consumer has income I = 20. (a) Before doing any calculation, make an educated guess about the relative magnitude of the three substitution effects and the three income effects...
Find the optimal bundle for the following utility functions and for budget line (P1X1+P2X2=m) a) U(X1,X2)=X1X2 b) U(X1,X2)=X1^2X2^3 c) U(X1,X2)=X1^2+2X2 d)U(X1,X2)= ln (x1^3X2^4) e) U(X1,X2)= 2X1+X2 f) U(X1,X2)= min (2X1,X2)
Matt’s utility is given by u(x1,x2)=min{x1,x2}+min{x3,x4}. Which of the following four bundles (A, B, C, and D) will he most prefer? Bundles are written (x1,x2,x3,x4). a. A = (2, 2, 2, 2) b. B = (6, 0, 0, 2) c. C = (4, 2, 1, 1) d .D = (6, 1, 3, 1)
1) Optimization problem 1 Max U(x, y) = x1^0.5 + x2^0.5 s.t. x1 + x2 =16 Find the optimum bundle; check if there is a minimum or a maximum. 2) Give the interpretation of the expenditure function, explain and show its properties. Draw the diagram of the expenditure function. Derive the compensated demand function for x1 and x2 E( p, u) = p(p1. p2)^0,5 and the uncompensated demand function. 3) Derive the expenditure function when the direct utility function...
1. (20 points) Mac has utility over x; and x2 given by u(x1, x2) = min . If P. = $1. P. = $1. and I = $100. find the value of xı* (Hint: This is Leontief utility, the kind with right-angled indifference curves) 2. (10 points) If P, = $4, P2 = $2, and I = $20, and my utility is given by u(x1, x2) = 4x1 + 3x2, find x* (Note: I'm asking for optimal consumption of Good...