Econ808H1.02

Econ808H1.02 - The Ohio State University Department of...

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The Ohio State University Department of Economics Econ 808–Problem Set #1 Due Thursday, April 11 Spring 2002 Levin and Peck (1) In the following economy, there are two consumers, two …rms, and two goods (labor/leisure and food). For i = 1,2, consumer i is endowed with zero units of food and 1 unit of leisure, ! i =(0 ; 1) .L e t t i n g x i denote consumer i’s consumption of food and ` i denote consumer i’s consumption of leisure, the utility function is: log( x i ) + log( ` i ) . Let y 1 denote …rm 1’s output of food and L 1 denote …rm 1’s labor input (so that L 1 must be nonnegative). Then …rm 1’s production function, the frontier of its production set, is given by: y 1 = AL 1 , where the parameter A is a positive real number. Firm 1 is owned by consumer 1. Let y 2 denote …rm 2’s output of food and L 2 denote …rm 2’s labor input (so that L 2 must be nonnegative). Then …rm 2’s production function, the frontier
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This note was uploaded on 07/17/2008 for the course ECON 808 taught by Professor Peck during the Spring '02 term at Ohio State.

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Econ808H1.02 - The Ohio State University Department of...

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