201Spring05Final - University of California, Berkeley...

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University of California, Berkeley Economics 201A Spring 2005 Final Exam–May 20, 2005 Instructions: You have three hours to do this exam. The exam is out of a total of 300 points; allocate your time accordingly. Please write your solutions to Parts I and II in separate bluebooks. Part I 1. (100 points) Define or state and briefly discuss the importance of each of the following within or for economic theory: (a) Shapley-Folkman Theorem on Sums of Sets (b) local nonsatiation (c) Walrasian Quasiequilibrium (d) Second Welfare Theorem in an Arrow-Debreu Economy (e) Debreu-Gale-Kuhn-Nikaido Lemma 2. (80 points) Consider an Edgeworth Box economy, with endowments ω 1 = (3 , 1), ω 2 = (1 , 3), and utility functions u 1 ( x 11 ,x 21 ) = x 1 / 3 11 x 2 / 3 21 , u 2 ( x 12 ,x 22 ) = x 2 / 3 12 x 1 / 3 22 . (a) Find all the Walrasian Equilibria of this economy. (b) Compute the set of Pareto Optima of this economy. (c) Find prices and transfers that make the allocation
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This note was uploaded on 08/01/2008 for the course ECON 201B taught by Professor Anderson during the Spring '06 term at University of California, Berkeley.

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201Spring05Final - University of California, Berkeley...

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