16.12. Two consumers, Ron and David, together own 1,000 baseball cards and 5,000Pokémon cards. Let xR denote the quantity of baseball cards owned by Ron and yR denotethe quantity of Pokémon cards owned by Ron. Similarly, let xD denote the quantity ofbaseball cards owned by David and yD denote the quantity of Pokémon cards owned byDavid. Suppose, further, that for Ron, MRSRxy = yR/xXR, while for David, MRSPxy = yD/2xD.Finally, suppose xR = 800, yR = 800, xD = 200, and yD = 4,200.a) Draw an Edgeworth box that shows the set of feasible allocations in this simpleeconomy.b) Show that the current allocation of cards is not economically efficient.c) Identify a trade of cards between David and Ron that makes both better off. (Note:There are many possible answers to this problem.)

The dot in the Edgeworth field indicates how many benefits each consumer will receive. Each point in…

16.12. Two consumers, Ron and David, together own 1,000 baseball cards and 5,000 Pokémon cards. Let xR denote the quantity of baseball cards owned by Ron and yR denote the quantity of Pokémon cards owned by Ron. Similarly, let xD denote the quantity of baseball cards owned by David and yD denote the quantity of Pokémon cards owned by David. Suppose, further, that for Ron, MRSRy = yR/XR, while for David, MRS"1y = yD/2xD. Finally, suppose xR = 800, yR = 800, xD = 200, and yD = 4,200. a) Draw an Edgeworth box that shows the set of feasible allocations in this simple economy. b) Show that the current allocation of cards is not economically efficient. c) Identify a trade of cards between David and Ron that makes both better off. (Note: There are many possible answers to this problem.)

16.12. Two consumers, Ron and David, together own 1,000 baseball cards and 5,000 Pokémon cards. Let xR denote the quantity of baseball cards owned by Ron and yR denote the quantity of Pokémon cards owned by Ron. Similarly, let xD denote the quantity of baseball cards owned by David and yD denote the quantity of Pokémon cards owned by David. Suppose, further, that for Ron, MRSRy = yR/XR, while for David, MRS"1y = yD/2xD. Finally, suppose xR = 800, yR = 800, xD = 200, and yD = 4,200. a) Draw an Edgeworth box that shows the set of feasible allocations in this simple economy. b) Show that the current allocation of cards is not economically efficient. c) Identify a trade of cards between David and Ron that makes both better off. (Note: There are many possible answers to this problem.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2.
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1
Please provide full derivation, and 5. Casper consumes cocoa and cheese. Cocoa is sold in an unusual way. There is only one supplier, and the more cocoa you buy from him, the higher the price you have to pay per unit. In fact y units of cocoa will cost Casper y2 dollars. Cheese is sold in the usual way at a price of 2 dollars per unit. Casper's income is 20 dollars and his utility function is U(x, y)=x+2y, where x is his consumption of cheese and y is his consumption of cocoa. a. Sketch Casper's budget set and shade it in. b Sketch some of his indifference curves and label the point that he chooses. c. Calculate the amount of cheese and the amount of cocoa that Casper demands at these prices and this income.
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