● Say that v(p, y) = y ¹ - 2p₁² - 5p2. Compute the demand function 2.2P1-24. Consider a 2x2 pure exchange economy with agents 1 and 2, goods x and y, and initial endowmentse¹ = (8,6) and e² = (12, 4).• Draw the Edgeworth box, identify the initial endowment and define analytically and graphically(as precisely as possible) agents' budget sets if the price vector is p = (2,4).Let agents' utility function be given by U(x, y) = x + 2y. Is the initial endowment a ParetoEfficient allocation? Is the initial endowment a competitive equilibrium? Explain your answers.. Provide the general definition of competitive equilibrium for a 2x2 pure exchange economy.●

Since you have posted multiple questions, we will be solving only the first one. If you want…

Answered: -2 Say that v(p, y) = y¹ - 2p₁² - 5p2.…

Business

Economics

-2 Say that v(p, y) = y¹ - 2p₁² - 5p2. Compute the demand function 2₁.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: "It's hard for many of us to imagine a world without instant, limitless internet access. Some have…

A: Income elasticity is a term used in economics to describe how responsively demand for a specific…

Q: Suppose that the United States cracks down on illegal immigrants and returns millions of workers to…

A: The curves for supply and demand are crucial tools in economics used to examine markets and…

Q: Scones 1 2 3 4 5 Total Utility 10 18 24 28 30 Marginal Utility 6 2 efer to Table 6.3, which shows…

A: Total utility in economics refers to the overall satisfaction or benefit derived from consuming a…

Q: Refer to Table 14-2. What is the marginal product of the first worker? O a. 300 units O b. 50 units…

A: In economics, the marginal product of an input refers to the increase in output that occurs when an…

Q: Don Garlis is a landscaper. He is considering the purchase of a new commercial lawn mower, either…

A: EUAC stands for Equivalent Uniform Annual Cost. The EUAC formula converts upfront costs into an…

Q: What has been the average annual growth rate of U.S. real GDP per person over the 120 years from…

A: GDP or gross domestic product is the sum of the value of all end commodities produced within the…

Q: Which of the following figures is most likely to represent the cross price elasticity of demand of…

A: The cross-price elasticity of demand measures the responsiveness of change in demand for a good to…

Q: Calculate the marginal revenue from selling the 4th unit of output. Express your answer without…

A: Marginal revenue (MR) refers to the additional revenue generated by producing and selling one…

Q: Adjust project A's cash flows using the reinvestment assumptions and explain why the ranking by…

A: The modified Internal rate of return or the MIRR is an extension of the IRR used to assess the…

Q: led growth in an economy by a growing population. We could also achi growing economy by having and…

A: There are two periods : Young & Old Here we represent , Young period by t and old period as…

Q: Calculate the contribution to total performance from currency, country, and stock selection for the…

A: The goal of fund managers is to outperform the market. The percentage return on their portfolios can…

Q: "A free-market economy is withdrawn from government, in other words, it’s privately owned and thus…

A: The discussion post highlights the fundamental differences between free-market and state-directed…

Q: Suppose that the pricing strategies for FiberOne and of Starlink are shown in the table below. They…

A: Nash equilibrium is the point of a game corresponding to which each participant optimizes his…

Q: nalyze the impact of removing tariffs on Chinese solar panels on the demand and supply curves in the…

A: A supply curve can be described as the graphical representation of the price of a good or service…

Q: 6. What would happen to the market if the price ceiling was set above the equilibrium?

A: Price ceiling is a type if price control where price is set below the equilibrium price level. It…

Q: Based on the scenario above discuss the demand determinants. Provide clear commodity examples in…

A: Demand determinants are factors that can lead to shifts in the demand curve for a particular good or…

Q: Please no written by hand solutions One area of concern when it comes to Starlink is the cost. For…

A: The question at hand raises concerns about the affordability of Starlink, a satellite-based internet…

Q: The following is a demand schedule for shoes: Price (Per Pair) $120 $100 $80…

A: Elasticity means the responsiveness of demand or supply to changes in price or other factors. When…

Q: Suppose the government has elected not to impose regulations the industry, and so the firm faces no…

A: A monopoly market is a market structure in which a single firm or entity has exclusive control over…

Q: 3. Partial equilibrium You suffered through 1 and 2 (and later, 4), so I'm just going to give you…

A: Market supply refers to the total quantity of a specific good or service that all sellers or…

Q: If the average rural household income in Nigeria is US$60 then the demand for internet connectivity,…

A: Given the average rural household income in Nigeria is US$60, households would have to dedicate…

Q: Question 2: Ramsey Model with Fiscal Policy. Consider a Ramsey economy that is on its balanced…

A: Incorporating the impact of governmental actions on economic results, the Ramsey model with fiscal…

Q: Each of the three mutually exclusive alternatives shown has a 5-year useful life. If the MARR is…

Q: Briefly explain the differences between economic growth and economic development.

A: Economic growth refers to an increase in the production or output of goods and services in an…

Q: iv. V. If an individual values the marginal utility of consumption when old to be more worth more…

A: The question you provided is about an Overlapping Generations (OLG) model, which is a framework used…

Q: Refer to Case 9: Enron: Questionable Accounting Leads to Collapse The misconduct that occurred…

A: The collapse of Enron in 2001 stands as one of the most notorious corporate scandals in history. At…

Q: What happened, ceteris paribus, to the welfare of market participants when Starlink entered the…

A: The surplus experienced by all economic agent at the market equilibrium is the social welfare. The…

Q: The basis for trade is comparative advantage, not absolute advantage. O A. True OB. False

A: Absolute advantage by Adam Smith claims that trade is only possible when one country have absolute…

Q: Use the following graph for a market to answer the question below. Price 0 Q₁ Quantity Which of the…

A: Equilibrium price refers to the price at which the quantity demanded by consumers matches the…

Q: How would you use the theory of Demand and Supply to explain a historical event? Your answer needs…

A: The historical event we can use to explain the principle of demand and supply is the California…

Q: The following graph plots the market for electric guitars in Houston, where there are always over…

A: Two goods are said to be substitute when one good can be used instead to other. This means the…

Q: Delegated Monitoring Model: Suppose the central bank has increased the interest rate and depositors…

A: The Delegated Monitoring Model is an economic framework used to analyze the relationship between…

Q: y Petbarn is currently trading in a market where they face an own-price elasticity of demand which…

A: Optimal price can be described as the point of price at which a firm can maximize its profits or…

Q: III. Demand and Supply Together Table 3: Demand and Supply Together Qd 10 15 P $4.00 $3.50 $3.00…

A: A market is said to be in equilibrium, if at the given market price, the quantity demanded is equal…

Q: Supply chain shortages have limited the number of microchips available to car manufacturers in the…

A: Quota refers to the limit on the quantity of a product that the suppliers can supply in the market.…

Q: 2. Theory of the firm A firm has a production function q= f(k,l) = (k0.25 +10.25)2, w is the wage,…

A: Contingent Input demand function : It is the cost minimizing level of input which is required to…

Q: Use the following graph for a competitive market to answer the question below. $30 Price 25 20 15 10…

A: As we know that price floor is a minimum price for a commodity, or a service imposed by the…

Q: Identify which curve on the previous graph corresponds to each of the following descriptions. If the…

A: Short-run equilibrium is when aggregate demand equals short-run aggregate supply. Shifts in both…

Q: ************** For the following demand equation compute the elasticity of demand and determine…

A: The measure of the sensitivity of the quantity (Q) demanded of a product or service owing to changes…

Q: Calculate the rate of growth of output per worker.

A: Y/L = A(K/L) y = A k rate of growth of capital per worker = dkdk = savings - ( depreciation + pop…

Q: How Bangladeshi trade policy become updated. Write this in 1500 word. And also please put the…

A: Trade Policy: Trade policy refers to a set of rule, regulations, and measures implemented by a…

Q: "All government, indeed every human benefit and enjoyment, every virtue, and every prudent act, is…

A: A government can be described as a system or organization that has the authority to establish and…

Q: Computers are used to create and solve managerial decision models. True False

A: A managerial decision model refers to a mathematical or logical depiction of a real-life…

Q: Which of the following most likely explains why cigarettes has a price elasticity of demand of…

A: The measure of the sensitivity of the quantity (Q) demanded of a product or service to changes in…

Q: Supply chain shortages have limited the number of microchips available to car manufacturers in the…

A: We need to find ehuvh statements are correct,

Q: ccording to the midpoint metho at the demand for tomatoes is elasac inelastic elasticity of demand…

A: Price elasticity of demand measures the responsiveness of change in quantity demand to change in…

Q: There are two industries, 2 and y, with the following production functions: x= √k₂ + √₂ =(√₂ + √₂)²…

A: The production function determines all the input bundles that produce the same output level.The…

Q: Connor Designs Company has net cash flows from operating activities of $425,000 and net cash flows…

A: Free cash flow (FCF) is a measure of a company's ability to generate cash from its operations after…

Q: Which of the following is an example of structural unemployment

A: Structural unemployment is a longer-lasting form of unemployment caused by fundamental shifts in an…

Q: By considering situation below Option 1: Invest RM1000 and received RM110 monthly for 10 months…

A: Present worth analysis, also known as present value analysis or discounted cash flow analysis, is a…

Question

● Say that v(p, y) = y ¹ - 2p₁² - 5p2. Compute the demand function 2.
2P1
-2
4. Consider a 2x2 pure exchange economy with agents 1 and 2, goods x and y, and initial endowments
e¹ = (8,6) and e² = (12, 4).
• Draw the Edgeworth box, identify the initial endowment and define analytically and graphically
(as precisely as possible) agents' budget sets if the price vector is p = (2,4).
Let agents' utility function be given by U(x, y) = x + 2y. Is the initial endowment a Pareto
Efficient allocation? Is the initial endowment a competitive equilibrium? Explain your answers.
. Provide the general definition of competitive equilibrium for a 2x2 pure exchange economy.
●

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define utility function and budget constraint:

VIEW

Step 2: Calculate demand function:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 8 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

4) Consider a pure exchange economy with two goods, (x, y), and two consumers, (1, 2). Consumers' endowments are e1 = (4, 2) and e? = (6, 6) And their preferences are represented by utility functions: u(x, y) = x³y and u(x,y) = x³y$ (d) Set up the utility maximization problem for each consumer and solve for their Marshallian demand functions. (e) Compute the market demand for each good. () State the Walrus law for this economy and explain its economic interpretation. (g) Assume the excess demand for good x is zero, i.e., EDx = 0, and calculate the ratio of prices, i.e., p Ipy . Then, use this ratio of prices to show that the excess demand for good Yis also zero, i.e., EDy= 0. Briefly explain how this relates to the Walrus' law. (h) Given the price ratio found above, calculate the equilibrium allocations and show that feasibility, individual rationality, and Pareto efficiency holds.
In an exchange economy, there are two people, A and B, and two goods,X1 and X2. Their respective utility functions and endowments are u (x, x) = min {xf, 2x ) u (xf, x) = xf + x? %3D @A = (4, 9), w = (4, 0). Note: The As and Bs in the equations above are not powers but rather superscripts to indicate each agent. The minimum and maximum possible amounts of x*2 on the contract curve are Minimum x: %3D Maximum x %3D O 0; 4 O 4; 8 O4; 4
A small exchange economy is comprised of two of individuals, A and B, and two types of goods, x, ,x,. The individuals' preferences over two goods are can be represented by the following utility functions: U*(x;,.x; ) = min (2.x,x; ) and U* (x;,x;) = min(x;.2x, ). Initial endowments are 10 x, (individual A), and 10 x, (individual B). Calculate the price ratio which yields an equilibrium in the exchange market.
4. Consider a two-consumer, two-good exchange economy. Utility functions and endowments are u'(x1, x2) = (x1x2)² and e' = (18, 4),u²cx1, x2) = In(x1) + 2 In(x2) and e? = (3, 6). (a) Characterize the set of Pareto-efficient allocations as completely as possible. (b) Characterize the core of this economy. (c) Find a Walrasian equilibrium and compute the WEA. (d) Verify that the WEA you found in part (c) is in the core.
6B. Consider a two-good pure exchange economy with two consumers, A and B, whose respective utility functions are ua(xA1; TA2) = XA1 + 2x A2, uB(TB1, TB1) = rT32; while endowments are wA = (2,0) and wB = Then a profile of equilibrium consumption programs of that economy is: (a)(TA1, A2) = (0, 1), (B1, TB2) = (2, 1) (b)(xA1, A2) = (2/3, 4/3), (xB1, XB2) = (4/3, 2/3) (c) (A1,A2) =(4/3,4/3), (B1, B2) = (2/3, 2/3) (d) (A1, A2) = (2/3,2/3), (*B1, T B2) = (4/3, 4/3) (e) none of the previous four statements is correct (0,2). %3D %3D %3D %3D %3! %3D
(1) Consider a small exchange economy with two consumers, A and B, and two commodities, ₁ and 2. Consumer A's initial endowment is 3 units of ₁ and 2 unit of 2. Consumer B's initial endowment has 5 units of 2₁ and 4 units of r2. Consumer A's utility function is given by U(₁, ₁) = x^x^. Consumer B's utility function is given by U(x,x) = 2x² + x2. Note that and are the amounts of the two goods for Consumer A, and rf and are amounts of the two goods for Consumer B. (a) Draw an Edgeworth box, showing the initial allocation. Label it as E. Measure Consumer A's consumption from the lower left and Consumer B's from the upper right. Also measure the number of ₁ on the horizontal axis and the number of r2 on the vertical axis. (b) Draw Consumer A's indifference curve (ICA) going through E. (c) Draw Consumer B's indifference curve (ICB) going through E.
Consider a two-person, two good pure exchange economy. A's preferences over consumption bundles (x₁, x₂) are represented by the utility function UA (X₁, X₂) = x₁Xz B's preferences over consumption bundles are represented by the utility function UB (X₁, X₂) = x₁ + 2x₂ The initial endowment in goods x, and x₂ are given as: Individual A's as e^ = (1,0.5) and Individual B's as eB= (1, 1.5) 1. Draw an Edgeworth box indicating the endowment and preferences of this problem. 2. Find the set of Pareto Optimal Allocations in this economy and depict these in the Edgeworth box. MRSA = JUA/ƏX₁ X2 aUA/aX₂ X1 ƏUB/0x₁ MRSB = = 2 aUB/0x₂ Therefore, the set of all points where the MRS are equal are given by = 2 → X₂ = 2x1 Show Transcribed Text Advanced Microeconomics. Solve step by step so that I grasp the concept
Consider an exchange economy with two agents (i = a, b) and two goods (j = 1, 2) with the following characteristics. Agent a: Initial endowment (ea,1, Ca,2) = (1,0) and utility function Ua(Ca,1, Ca,2) = - exp(-ca,1) – exp(-ca.2) Agent b: Initial endowment (e,1, C,2) = (0, 3) and utility function U(ch1, Ch,2) = – exp(-c1) – exp(-c,2) Assume that there exists a competitive market for each good. Let p, denote the price of good j = 1,2. a) What is the competitive equilibrium of this economy? b) Illustrate the competitive equilibrium in the Edgeworth box. Draw at least the agents' indifference curves, the budget line, and the contract curve (i.e., the set of all Pareto optimal allocations). Clearly indicate which curves represent what.
In an exchange economy, two agents have utility functions u^(x, y) = x2 y and u"(x, y) = x · y, respectively, from x units of Good 1 and y units of Good 2. Assume the initial endowments are w A = (@A.1,2) and oB = (32,40), respectively. Suppose that an equilibrium is found in which the prices of the good are equal (that is, Pi = P2, i.e., the relative price is 1). If WA.1 = 60, then wA.2 %3D
In an exchange economy there are two people (A and B), and two goods (x and Y). Their respective utility functions and endowments are: UA(xA, YA) = 6xA + YA, UB(XB, YB) = XB + 6yB; WA = WB = (10, 10). What is the minimum possible amounts of XA in the core? Round your answer to 2 decimal points. %3D Answer: 10 The correct answer is: 11.67
In an exchange economy, there are two people (Shadi and Nino) and two goods (x1 and x2). Their initial endowments are ωS = (2, 4) and ωN = (3, 6). Their utility is given by the following functions: US(x1,x2) = x12x23 and UN(x1,x2) = x1x24. Which of the following is the equation for the contract curve? Group of answer choices a. x2N = 96x1N / (15 + 4x1N) b. x2N = 47x1N / (8 + 4x1N) c. x2N = 91x1N / 5 d. x2N = 16x1N / (3 + x1N) e. x2N = 41x1N / (9 + x1N)
Consider an exchange economy with two agents, A and B, and two commodities, X and Y. Assume their endowments are (w,w%) = (3,8) and (w,w%) U (xA, YA) = XAYA and U(xB, YB) = xB + YB• (2, 2). Also assume their utility functions are (a) Draw an Edgeworth box and show their endowments. (b) Find Pareto Efficient Allocations and show them on your Edgeworth box. Show the core of this exchange economy. (c) Is there a competitive equilibrium? If there is, find competitive equilibrium price ratio and allocation. If there exists no competitive equilibrium, tell which condition(s) of the first theorem of welfare economics is violated and show what goes wrong when price ratio is 1.