{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# HW 5 Answers - Econ 100B Tang Homework 5 Ch 10 Due Thursday...

This preview shows pages 1–3. Sign up to view the full content.

Econ 100B: Tang Winter Quarter 2009 Homework 5: Ch. 10 Due Thursday March 12, at the beginning of class. Please write your name and PID on your homework. 1) Consider the following Edgeworth box, showing indifference curves for two consumers A and B, an endowment point ( E ), and eight sample allocations (a, b, c, d, f, g, h, and i). B’s indifference curves are linear and all have the same slope. A’s indifference curves are standard shaped. a) Which of the points are Pareto efficient? b) Which are Pareto superior over the initial allocation E? a) h, c, d, f, and i are all pareto efficient b) b, c, d, and f are pareto superior to E 2) Suppose that the only goods in the economy are 100 units of almonds and 200 units of cashews. Megan has an initial allocation of 50 units of almonds and 100 units of cashews. She regards almonds and cashews as perfect 1-for-1 substitutes. Jose regards almonds and cashews as perfect 1-for-1 complements; he only wants to consume them together. Sketching almonds on the vertical, cashews on the horizontal, Megan’s origin in the bottom left and Jose’s in the upper right, sketch the Edgeworth box for the situation. Label the initial allocation as A, and shade the set of allocations (hint: it will be an area in the figure) that are Pareto superior to the initial allocation. A B E U A U B a b c d f g h i

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Econ 100B: Tang Winter Quarter 2009 0m is Megan’s origin, 0j is Jose’s origin, Am is quantity of Megan’s almonds, Cm is Megan’s cashews, Aj is Jose’s almonds, Cj is Jose’s cashews.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern