2005년 이인호 미시경제학 기말final(201).pdf

# 2005년 이인호 미시경제학 기말final(201).pdf -...

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212.201 Microeconomics 2005 In Ho Lee Final Examination December 5, 2005 1. Answer the following questions. (a) The cartel is not self-sustaining, that is, without a third party forcing the contract, they will not produce as is contracted. Is the statement true? Explain why or why not. (b) Insurance is provided at less than a fair price, i.e., the insurance premium people pay is more than the expected value of the payment they receive in case of accident. Explain why people still wants to buy insurance. 2. Imagine an exchange economy with two consumers ( A and B ) and two goods ( x and y ). Individual A ’s utility function is: U A = x 1 / 3 A y 2 / 3 A . Individual B has the following utility form: U B = x 2 / 3 B y 1 / 3 B . Initial endowments for A are ( x, y ) = (9 , 1) and for B are ( x, y ) = (1 , 19) . (a) Compute the demand functions of each individual for x and y. (b) Derive the equation for the contract curve and draw it in the Edgeworth box diagram. (c) Compute the equilibrium price and allocation of this economy.

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• Fall '16
• Hyun Hye Jung

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