Consider a 2-good, 2-agent pure exchange economy where the initial endowment is eA = (5, 5), eg = (5, 5) and preferences are represented by UA, UB: Ro UA (XA) = XA1XÁ2 and UB (XB) = x²₁x2. where Which 2 of the following 8 options are false: ********** For all ß [0, 1], the initial endowment is a Walrasian Equilibrium allocation. If ß < 1 then at prices p = (1,1) there will be excess demand of good 2 and excess supply of good 1. For all ß [0, 1], every Pareto efficient allocation can be supported as a Walrasian Equilibrium for some reallocation of resources. For any prices p (1, 1), the budget sets of both players leave the Edgeworth box. For all ß [0, 1], the bottom left and top right corners of the Edgeworth box (0A and Og) are both Pareto efficient.

Consider a 2-good, 2-agent pure exchange economy where the initial endowment is eA = (5, 5), eg = (5, 5) and preferences are represented by UA, UB: Ro UA (XA) = XA1XÁ2 and UB (XB) = x²₁x2. where Which 2 of the following 8 options are false: ********** For all ß [0, 1], the initial endowment is a Walrasian Equilibrium allocation. If ß < 1 then at prices p = (1,1) there will be excess demand of good 2 and excess supply of good 1. For all ß [0, 1], every Pareto efficient allocation can be supported as a Walrasian Equilibrium for some reallocation of resources. For any prices p (1, 1), the budget sets of both players leave the Edgeworth box. For all ß [0, 1], the bottom left and top right corners of the Edgeworth box (0A and Og) are both Pareto efficient.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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