4. Douglas utility functions. Suppose that Tony's utility function is U = GH, and Margaret's utility function is Um= Gm(Hm)³. Between them, they own 100 units of G and 50 units of H. Solve for their contract curve. In a pure exchange economy with two goods, G and H, the two traders have Cobb- Continuing with question 4, determine p, the competitive price of G, where the price of H is normalized to equal one.

4. Douglas utility functions. Suppose that Tony's utility function is U = GH, and Margaret's utility function is Um= Gm(Hm)³. Between them, they own 100 units of G and 50 units of H. Solve for their contract curve. In a pure exchange economy with two goods, G and H, the two traders have Cobb- Continuing with question 4, determine p, the competitive price of G, where the price of H is normalized to equal one.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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