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.

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Consider a one-consumer one-firm economy in which u(x) = axz+xq, w = 1 and f(z) = z². (a) Derive a competitive equilibrium for this economy. (b) Derive the Pareto set of this economy.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Question

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.

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