47. Consider an exchange economy with two goods and two agents. Agent 2's utility is as above. The equilibrium allocation is (x1, Y1) = (6,1) and (x2, Y2) equilibrium prices are (1,1). What could be the endowment? (4, 4). The A. Agent l's endowment is (2,5) and agent 2's endowment is (8,0) B. Agent 1's endowment is (7,0) and agent 2's endowment is (3,5) C. Both (a) and (b)
47. Consider an exchange economy with two goods and two agents. Agent 2's utility is as above. The equilibrium allocation is (x1, Y1) = (6,1) and (x2, Y2) equilibrium prices are (1,1). What could be the endowment? (4, 4). The A. Agent l's endowment is (2,5) and agent 2's endowment is (8,0) B. Agent 1's endowment is (7,0) and agent 2's endowment is (3,5) C. Both (a) and (b)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
The questions are attached in the image. The questions are based on 'General equilibrium' model in 'economics'. (please do not tag it in some other subject)
These are simple Multiple choice questions which are undergrad level. Please do not reject them.
The answers to 45,46 and 47 are D,C and C respectively.
Please answer the following as well:
1. For 45, provide the set of pareto efficient outcomes.
2. For 46, provide an algebric solution if possible. Provide a mathematical argument.
3. For 47, provide provide a set of points (if exists) that will take us to the given equilibrium under the given conditions.
The questions are easy. PLEASE DO NOT REJECT IT!
Transcribed Image Text:47. Consider an exchange economy with two goods and two agents. Agent 2's utility is
as above. The equilibrium allocation is (x1, Y1) = (6,1) and (x2, Y2)
equilibrium prices are (1, 1). What could be the endowment?
(4, 4). The
A. Agent l's endowment is (2,5) and agent 2's endowment is (8,0)
B. Agent l's endowment is (7,0) and agent 2's endowment is (3,5)
C. Both (a) and (b)
D. Neither (a) nor (b)
Transcribed Image Text:45. Consider an exchange economy with two agents, 1 and 2, and two goods, X and Y.
There are 6 units of X and 4 units of Y available. An allocation is denoted by (x1, Y1),
(x2, Y2), where (x1, Y1) is agent 1's consumption bundle, (x2, Y2) is agent 2's consumption
bundle, r1 + x2 = 6 and y1 + Y2 = 4. Agent 1 has the utility function u1 = min{x1,Y1}
and agent 2 has the utility function u2(x2, Y2)
min{r2, y2}. Which of the following
=
allocations is not Pareto efficient?
А. (2,2), (4,2)
В. (3,2), (3,2)
С. (3,1), (3,3)
D. (1,2), (5,2)
46. Consider an exchange economy with two goods and two agents have the same preferences
as in the previous question. Agent l's endowment is (0, a) and agent 2's endowment is
(B, 0). What is generally true?
A. Any allocation in which each agent gets equal amounts of the two goods is an
equilibrium allocation
B. If B < a, then the price of X is 0
C. If B > a, then the price of X is 0
D. Any allocation in which agent 2 gets none of good Y is an equilibrium allocation
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education