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Unformatted text preview: the other allocations, explain why it is not a competitive allocation (Hint: Cite one of the conditions for a competitive allocation). (a) [ q s ;q d ;;m ] = [5 ; 10 ; 25 ; 50], p = 10 (b) [ q s ;q d ;;m ] = [10 ; 10 ; 25 ; 50], p = 5 (c) [ q s ;q d ;;m ] = [10 ; 10 ; 25 ; 100], p = 10 (d) [ q s ;q d ;;m ] = [10 ; 10 ; 25 ; 50], p = 5 3. Consider the following quasilinear economy: A rm has cost c ( q s ) = 8( q s ) 2 and a consumer gets utility from money and consuming the good according to U ( m;q d ) = m + ln( q d ). The initial income of the consumer is Y = 20. Find the competitive allocation [ q ;q ; ;m ] and price, p for this economy. 1...
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This note was uploaded on 12/08/2010 for the course PYSCH 111 taught by Professor Malley during the Spring '08 term at University of Michigan.
- Spring '08