Cobb-DouglasexampleforParetoEfficiency

Cobb-DouglasexampleforParetoEfficiency - Initial Values...

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Cobb-Douglas Example for Pareto Efficiency (A) I. Input Variables x1c, x2c, xj, y1, y2, lam1, lam2, lam3; Equations foc1, foc2, foc3, foc4, foc5, mc1, mc2, mc3; foc1 . . 0.5*Sqrt(y1/x1c)-lam3 =e= 0; foc2 . . -0.5*lam1*Sqrt(y2/x2c)-lam3 =e= 0; foc3 . . 0.5*Sqrt(x1c/y1)-lam2 =e= 0; foc4 . . -0.5*lam1*Sqrt(x2c/y2)-lam2 =e= 0; foc5 . . 18.004*lam2*xj =e= 4.501*lam3; mc1 . . Sqrt(x2c*y2) =e= 2.378; mc2 . . 18 =e= y1+y2+4.501*(2*(xj**2)+1); mc3 . . x1c +x2c =e= 4.501*xj;
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Unformatted text preview: Initial Values x1c.l=1.5; x2c.l=1.5; xj.l=0.8; y1.l=5; y2.l=4; lam1.l = -0.3; lam2.l = 0.3; lam3.l = 0.3; model test /foc1.x1c, foc2.x2c, foc3.y1, foc4.y2, foc5.xj, mc1.lam1, mc2.lam2, mc3.lam3/; OPTION MCP = path; solve test using mcp; Display x1c.l, x2c.l, y1.l, y2.l, xj.l, lam1.l, lam2.l, lam3.l; II. Output x1c = 1.769 x2c = 1.414 y1 = 5.000 y2 = 3.999 xj = 0.707 lam1 = -1.000 lam2 = 0.297 lam3 = 0.841...
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This note was uploaded on 01/09/2011 for the course ECON 7140 taught by Professor Kutler during the Spring '10 term at Utah Valley University.

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