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DraftFinalODDODDEVEN

DraftFinalODDODDEVEN - 1 Take-Home Final ODD-ODD-EVEN...

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Take-Home Final ODD-ODD-EVEN 1 Take-Home Final Exam ODD-ODD-EVEN This exam is take-home, open-book, open-notes. You may consult any published source (cite your references). Other people are closed. The exam you turn in should be your own personal work. Do not discuss with classmates, friends, professors (except with Prof. Starr or Ms. Fried — who promise to be clueless), until the examination is collected. Please use a blue book. There are four questions. Answer all questions fully. State clearly any additional assumptions you need. 1 Consider a two-person pure exchange economy (Edgeworth Box) made up of the following two households. The notation “min[ xy, 16]” means the minimum of xy and 16. Superscripts denote the household name — nothing in this problem is raised to a power. Household 1 Household 2 Endowment r 1 = (1 , 9) r 2 = (9 , 1) Utility Function u 1 ( x, y ) = xy u 2 ( x, y ) = min[ xy, 16] 1. Household 2 does not fulfill C.IV. Household 2 has a maximum utility of 16; whenever household 2’s holdings of x and y fulfill xy >
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