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Econ 102
Roger E A Farmer
Fall 2008
Assignment for Week Six
1.
Solve the problem from Lecture 9. What is the monetary value of the transfer to Mr. B?
2.
Find the equation of the Pareto frontier for an economy with 2 units of good x, and 3
units of good y
when the utility functions of the two people are
() ()
log
log
AA
Ux
=+
A
y
)
B
y
() (
3log
2log
BB
If the initial endowments are equally distributed between Mr. A and Mr. B find the
equilibrium relative prices.
3.
Consider the following one period – one person – production economy. Utility is given
by the function
2
2
L
UC
=−
,
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 Fall '08
 Serra
 Macroeconomics

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