Please only answer Q2 1. For this and the following three problems, consider a partial equilibrium model withtwo households with preferences given by u1(¤1,m1) = 2ln(xı + 1/6) + mị andu2(x2, m2) = 3 In(x2+1/3)+m2, and two firms with cost functions for the productionof good 1 given by c1(y1) = yỉ and c2(42) = v3. Find the demand function for good1 of each household and the market demand function for good 1, and illustrate eachhousehold demand and the market demand curves in a graphic.2. Find the supply function for good 1 of each firm and the market supply function forgood 1, and illustrate each firm supply and the market supply curves in a graphic.3. Find the competitive equilibrium price for good 1, as well as the equilibrium de-mand of each household, the equilibrium supply for each firm, the households' utilityin equilibrium, the firms' equilibrium profits, the consumer surplus, the producersurplus, and the total surplus.4. Suppose that a price ceiling of 1 is put in place. Under the assumption of efficientrationing, find the supply of each firm, the consumption for each household, the newconsumer surplus, the new producer surplus, the new total surplus, and the surplusloss in relation to the competitive outcome.

We are going to use a relationship between Marginal Cost and Supply function.Answer 2) Cost function for firm 1 = Y12 Cost function for firm 2 = Y22 We know that, Marginal Cost of a firm is a proxy of supply curve when it is above average cost Now, Average Cost for firm 1 = Y1 Average Cost for firm 2 = Y2 Marginal Cost for firm 1 = 2Y1 Marginal Cost for firm 2 = 2Y2 From above expressions we have all positive values of Y , average cost is less than marginal cost. Therefore, Supply function for firm 1 is "2Y1" Supply function for firm 2 is "2Y2" Market Supply function = Supply from firm 1 + Supply from firm 2 = 2(Y1+Y2)

Business

Economics

1. For this and the following three problems, consider a partial equilibrium model with two households with preferences given by u1(æ1,m1) = 2ln(xı + 1/6) + m1 and u2(x2, m2) = 3 In(x2+1/3)+m2, and two firms with cost functions for the production of good 1 given by c1(y1) = y} and c2(y2) = y3. Find the demand function for good 1 of each household and the market demand function for good 1, and illustrate each household demand and the market demand curves in a graphic. 2. Find the supply function for good 1 of each firm and the market supply function for good 1, and illustrate each firm supply and the market supply curves in a graphic.

1. For this and the following three problems, consider a partial equilibrium model with two households with preferences given by u1(æ1,m1) = 2ln(xı + 1/6) + m1 and u2(x2, m2) = 3 In(x2+1/3)+m2, and two firms with cost functions for the production of good 1 given by c1(y1) = y} and c2(y2) = y3. Find the demand function for good 1 of each household and the market demand function for good 1, and illustrate each household demand and the market demand curves in a graphic. 2. Find the supply function for good 1 of each firm and the market supply function for good 1, and illustrate each firm supply and the market supply curves in a graphic.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

When does the money have time value?
Write any two precautions of income method
Susan has a choice between two perpetuities payable at the beginning of every month. The first pays $100 today and increases by 1% every month. The second pays $100 today and increases by $X every month. These two annuities are equally valuable at i= 20%. Find X.
how to calculate future value
How did you get the formula for letter B?
Pls help ASAP
Q:6 a and b
Dana was dating Wade, a wealthy real estate entrepreneur. Wade was much older than Dana and knew he needed to offer something “special” to make her stay. Wade told Dana that if she continued dating him, he would pay her $10,000 a month. Wade paid Dana for two years when suddenly, for no apparent reason, he stopped the monthly payments. Dana stayed with Wade for another six months, but decided enough was enough and left. She wanted the $60,000 she was owed for the six months; Wade refused to pay her. Is Dana entitled to the $60,000?
The fractions make no sense
What equation can determine whether a cryptocurrency is significantly overvalued?
What is the future worth of a series?
$200 is not the correct answer. Please credit my account for the wrong answer provided.