ECN700-HW6

ECN700-HW6 - 2 has an initial endowment of two units of...

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Problem Set 6 1. Consider the following exchange economy. There are two goods and two consumers. The first consumer has a utility function U 1 ( x 1 , x 2 ) = x 1 x 2 , and the second consumer has a utility function U 2 ( x 1 , x 2 ) = x 1 + x 2 . Consumer 1 has an initial endowment of 2 units of good 1. Consumer 2 has an initial endowment of two units of good 2. Find a Walrasian equilibrium price for this economy. 2. Consider the following exchange economy. There are two goods and two consumers. The first consumer has a utility function U 1 ( x 1 , x 2 ) = x 2 1 x 2 , and the second consumer has a utility function U 2 ( x 1 , x 2 ) = x 1 x 2 2 . Consumer 1 has an initial endowment of 2 units of good 1. Consumer
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Unformatted text preview: 2 has an initial endowment of two units of good 2. Find a Walrasian equilibrium price for this economy. 3. Consider the following exchange economy. There are two goods and two consumers. The rst consumer has a utility function U 1 ( x 1 , x 2 ) = min(2 x 1 , x 2 ), and the second consumer has a utility function U 2 ( x 1 , x 2 ) = min(3 x 1 + x 2 , 2 x 1 + 3 x 2 ). Consumer 1 has an initial endowment of 4 units of good 1. Consumer 2 has an initial endowment of 3 units of good 2. Find a Walrasian equilibrium price for this economy....
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This note was uploaded on 10/22/2009 for the course ECG 700 taught by Professor Morrill during the Fall '09 term at N.C. State.

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