2. There are two consumers A and B and two commodities x and y. UA = x%yA-a: Utility function of consumer A. w: consumer A's endowment of good x w: consumer A's endowment of good y „a„1-a. UB = 2xB + YB: Utility function of consumer B. w: consumer B’s endowment of good x w: consumer B's endowment of good y Px: price of good x Py: price of good y ‚y. p = Px /p,: relative price of good x a. Find the equation of the contract curve. b. Find the competitive equilibrium (p*, xả, yÃ, xâ, yB). Your answers should be in terms of Py the parameters.

2. There are two consumers A and B and two commodities x and y. UA = x%yA-a: Utility function of consumer A. w: consumer A's endowment of good x w: consumer A's endowment of good y „a„1-a. UB = 2xB + YB: Utility function of consumer B. w: consumer B’s endowment of good x w: consumer B's endowment of good y Px: price of good x Py: price of good y ‚y. p = Px /p,: relative price of good x a. Find the equation of the contract curve. b. Find the competitive equilibrium (p*, xả, yÃ, xâ, yB). Your answers should be in terms of Py the parameters.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Solve and Explain Q#40 and 41
3.
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