An economy with many consumers (Amy, Hao, ...), many producers, two goods (A and B) and two inputs (L and K) is in a competitive general equilibrium. Which of the following conditions are satisfied in this economy? (Select all that apply) The absolute value of the slope of PPF (with good A on the horizontal axis) is equal to MCA/ MCB, the ratio of marginal costs of producing goods A and B, at any point on PPF O MRSAB = PA / PB for all consumers O For every possible redistribution of goods among the consumers, some of them will be better off and some of them will be worse off.

An economy with many consumers (Amy, Hao, ...), many producers, two goods (A and B) and two inputs (L and K) is in a competitive general equilibrium. Which of the following conditions are satisfied in this economy? (Select all that apply) The absolute value of the slope of PPF (with good A on the horizontal axis) is equal to MCA/ MCB, the ratio of marginal costs of producing goods A and B, at any point on PPF O MRSAB = PA / PB for all consumers O For every possible redistribution of goods among the consumers, some of them will be better off and some of them will be worse off.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

12
Consider a two-good exchange economy with two types of consumers. Type A have the utility function And an endowment of 3 units of good 1 and k units of good 2. Type B has the utility function And an endowment of 6 units of good 1 and 21 - k units of good 2. a. Find the competitive equilibrium outcome and show that the equilibrium price p* = p1/p2 of good 1 in terms of good 2 is p* = 21+k/15. b. Find the income levels (MA; MB) of both types in equilibrium as a function of k. c. Suppose that the government can make a lump-sum transfer of good 2, but it is impossible to transfer good 1. Use your answer to part b to describe the set of income distributions attainable through such transfers. Draw this in a diagram. d. Suppose that the government can affect the initial distribution of resources by varying k. Find the optimal distribution of income if (i) the SWF is W = log(MA) + log(MB) and (ii) W = MA + MB.
12
Fall 2023/24) Adrienne and Stephen consume pizza, Z, and cola, C. Adrienne's utility function is and Stephen's is Us = (23) 05 (₂) 05 Their endowments are ZA-10, CA = 60, Zg=10, and C=140. What are the competitive equilibrium prices, where one price is normalized to equal one? is S $$ (Enter) UA =ZA CA Determine p, the competitive price of Z, where the price of C is normalized to equal one. Enter your response rounded to two decimal places) The competitive price, p.
An economy with many consumers (Amy, Hao, ...), many producers, two goods (A and B) and two inputs (L and K) is in a competitive general equilibrium. Which of the following conditions are satisfied in this economy? (Select all that apply) The absolute value of the slope of PPF (with good A on the horizontal axis) is equal to MCA / MCB, the ratio of marginal costs of producing goods A and B, at any point on PPF MRSAB = PA / PB for all consumers For every possible redistribution of goods among the consumers, some of them will be better off and some of them will be worse off. MRS = MRT MRS MRTS PA = MCA and PB = MCB MUAmy = MUHao A = PA MRTS = PA / PB MUAmy A = MCA and MUAmy B = MCB MRTS between labour and capital is the same for all firms, whether producing good A or good B. the ratio of input marginal products must be equal to the ratio of input prices MRT = MRTS for all firms, whether producing good A or good B For every possible redistribution of inputs among the firms, the quantity…
1. a) Consider an economy with 3 agents, Mohammed (M), David (D) and Susan (S). There are two goods available, good x, and good y. The marginal rates of substitution (where good x is on the horizontal axis and good y is on the vertical axis) are given by for Mohammed, for David and for Mohammed and David are both consuming twice as much of the good x than good y, while Susan is consuming equal amounts of x and y. What are the conditions for Pareto efficiency in an exchange economy? Are these consumption levels economically efficient? Can these consumption allocations be observed in a perfectly competitive equilibrium in an exchange economy without production? Explain. b. There are two firms in the economy. Each firm employs positive amounts of capital and labour. The technology satisfies diminishing marginal rate of technical substitution of labour for capital. Currently, A’s marginal rate of technical substitution of labour for capital is 4 while B’s marginal rate of technical…
3. Consider a one-consumer one-firm economy in which u(x) = aTz+1q, w = 1 and f(z) = z2. (a) Derive a competitive equilibrium for this economy. (b) Derive the Pareto set of this economy.
Please explain and demonstrate the following questions. Refer to the table below, which shows the maximum number of goods X and Y that producers A and B can produce in one day. Q15. If there are 20 units of good X being produced efficiently each day, how many units of good Y will be produced each day? a) 30 b) 40 c) 50 d) 60 Q16. If there are 20 units of good Y being produced efficiently each day, how many units of good X will be produced each day? a) 40 b) 60 c) 80 d) 100
9
True/False For each of the following, you MUST indicate whether the statement is TRUE or FALSE and you MUST explain why. 1. 2. 3. 4. 5. A Nash Equilibrium is always Pareto Efficient. When there is production, a Competitive Equilibrium is not always Pareto Efficient due to possible increasing returns to scale. A Prisoner's Dilemma must involve prisoners. This is what makes the model interesting. A Pigouvian Tax to correct for the inefficiencies caused by a negative externality should be corrected by placing the tax between the Private Demand and the Social Demand at the intersection of Supply and Private Demand. To find the Social Welfare Function, simply add up the individual utility functions of each member of society.
Multiple choice question. As opposed to general equilibrium analysis, partial equilibrium analysis looksa) at an equilibrium and changes to it in a single, isolated market.b) at how changes in all other markets effect a particular market.c) at how equilibrium is determined in all markets simultaneously.d) at either price or quantity movements.