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Unformatted text preview: Economics 11, Winter 2006: Homework 09 Due: 3PM, Thursday, March 16 1. On Tooraloora Island there are 1 castaway and many coconut trees. The castaway is endowed only with 24 hours/day of her own labor. The coconut trees grow lots of coconuts more than the castaway can eat but to get 1 coconut requires climbing the tree and removing the husk; this requires 1 hour in total. The castaway cares about coconuts C and her own labor L according to the utility function u ( C,L ) = C 1 / 3 L 2 / 3 . (a) Write this as a production economy. What are the goods? What is the production function? What are the variables to be determined in a competitive equilibrium? (b) Solve for the competitive equilibrium. (Of course there is no reason for thinking about competitive equilibrium in this story; it is just a simple exercise to give you some practice.) The remaining problems concern two countries and the possibility of trade....
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This note was uploaded on 04/01/2010 for the course ECON Econ 11 taught by Professor Mcdevitt during the Fall '07 term at UCLA.
- Fall '07