5. Given that excess demands are continuous and satisfy Walras' law, use Brouwer's Fixed Point Theorem to establish the existence of competitive equilibrium in a simple exchange economy. Suppose that an apple orchard is located next to a bee keeper. If the orchard produces x apples and the bee keeper produces y honey and the cost functions of the two are as follows: C(x) = x² + 10x +9 C(y) = y² - 8x What will be the socially optimal amount of apples that can be produced? How does this compare to privately optimal amount?

5. Given that excess demands are continuous and satisfy Walras' law, use Brouwer's Fixed Point Theorem to establish the existence of competitive equilibrium in a simple exchange economy. Suppose that an apple orchard is located next to a bee keeper. If the orchard produces x apples and the bee keeper produces y honey and the cost functions of the two are as follows: C(x) = x² + 10x +9 C(y) = y² - 8x What will be the socially optimal amount of apples that can be produced? How does this compare to privately optimal amount?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4.1, 4.2, 4.3
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