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HW_07_REV

# HW_07_REV - and endowments for the two consumers are u A x...

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Economics 11, Winter 2010; HW Assignment #7 Due 3:15PM Thursday Feb 25 1. Consider a two consumer economy with two goods; utility functions and endowments for the two consumers are u A ( x, y ) = xy , e A = (300 , 600) u B ( x, y ) = xy , e B = (100 , 400) (Notice that the consumers have the same utility functions but different endowments.) (a) find the contract curve (b) find equilibrium prices and choices (c) sketch an Edgeworth box showing the contract curve, equilibrium prices and choices 2. Consider a two consumer economy with two goods; utility functions and endowments for the two consumers are u A ( x, y ) = xy , e A = (300 , 600) u B ( x, y ) = x + 10 y , e B = (300 , 600) (Notice that the consumers have the same endowments but different utility functions.) (a) find the contract curve (b) find equilibrium prices and choices (c) sketch an Edgeworth box showing the contract curve, equilibrium prices and choices 3. Consider a two consumer economy with two goods; utility functions and endowments for the two consumers are

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Unformatted text preview: and endowments for the two consumers are u A ( x, y ) = 2 x 1 / 2 + 3 y 1 / 2 , e A = (300 , 600) u B ( x, y ) = 3 x 1 / 2 + 2 Y 1 / 2 , e B = (300 , 600) (Notice that the consumers have the same endowments but diﬀerent utility functions.) Find equilibrium prices and choices. 1 4. Consider a two consumer economy with three goods; utility functions and endowments for the two consumers are u A ( x, y, z ) = x 2 yz 2 , e A = (300 , 600 , 300) u B ( x, y, z ) = xy 2 z , e B = (300 , 600 , 200) Find equilibrium prices and choices. 5. Consider a four-consumer economy with three goods; utility functions and endowments for the consumers are u A ( x, y, z ) = x 2 yz , e A = (200 , 600 , 200) u B ( x, y, z ) = xy 2 z , e B = (200 , 600 , 200) u C ( x, y, z ) = xyz 2 , e C = (600 , 200 , 200) u D ( x, y, z ) = xyz , e C = (200 , 400 , 600) Find equilibrium prices and choices. 2...
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HW_07_REV - and endowments for the two consumers are u A x...

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