PS13 - Intermediate Microeconomics, Winter 2008 Problem Set...

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Unformatted text preview: Intermediate Microeconomics, Winter 2008 Problem Set No 13 due: Monday, March 10; Tuesday, March 11 Q1. For the following utility functions and total endowments: Find the market clearing price(s) and the competitive allocation. Hint: You can set one price equal to one. 1. (a) U A ( q 1 ; q 2 ) = U B ( q 1 ; q 2 ) = q 1 q 2 . e A = (20 ; 20) ; e B = (100 ; 60) (b) U A ( q 1 ; q 2 ) = q 1 2 1 + q 2 , U B ( q 1 ; q 2 ) = q 1 2 1 + q 2 . e A = (20 ; 20) ; e B = (100 ; 60) : (c) U A ( q 1 ; q 2 ) = q 1 + q 2 , U B = 1 2 q 1 2 1 + 1 2 q 1 2 2 , e A = (20 ; 20) ; e B = (20 ; 60) (d) U A ( q 1 ; q 2 ) = min f q 1 ; q 2 g , U B ( q 1 ; q 2 ) = q 1 q 2 , e A = (20 ; 20) ; e B = (20 ; 60) (e) U A ( q 1 ; q 2 ) = q a 1 q 2 , U B ( q 1 ; q 2 ) = q 1 q 2 , a > 1 . e A = (20 ; 20) ; e B = (20 ; 20) (f) U A ( q 1 ; q 2 ) = Aq 1 + q 2 , U B ( q 1 ; q 2 ) = Bq 1 + q 2 , A > B . e A = (20 ; 20) ; e B = (20 ; 20) (g) U A ( q 1 ; q 2 ) = min f q 1 ; q 2 g , U B ( q 1 ; q 2 ) = q a 1 q 2 , e A = (20 ; 20) ; e...
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This note was uploaded on 12/10/2011 for the course ECON 401 taught by Professor Burbidge,john during the Winter '08 term at Waterloo.

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