Consider a pure exchange economy with two private goods, and two con- sumers denoted A,B whose respective utility functions and initial endowments are: uA(x1A, x2A) = x1A + x2A, uB(x1B,x2B)=1/3 lnx1B+2/3 lnx2B and WA=(2,0), WB= (0,2). Then, a competitive equilibrium allocation is:
Consider a pure exchange economy with two private goods, and two con- sumers denoted A,B whose respective utility functions and initial endowments are: uA(x1A, x2A) = x1A + x2A, uB(x1B,x2B)=1/3 lnx1B+2/3 lnx2B and WA=(2,0), WB= (0,2). Then, a competitive equilibrium allocation is:
Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
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Consider a pure exchange economy with two private goods, and two con-
sumers denoted A,B whose respective utility functions and initial endowments
are: uA(x1A, x2A) = x1A + x2A, uB(x1B,x2B)=1/3 lnx1B+2/3 lnx2B and WA=(2,0), WB= (0,2). Then, a competitive equilibrium allocation is:
(a) (x1A, x2A) = (2,2), (x1B, x2B) = (0,0)
(b) (x1A, x2A) = (1,1), (x1B, x2B)=(1,1)
(c) (x1A, x2A) = (2/3,4/3), (x1B, x2B)=(4/3,2/3)
(d) (x1A, x2A) = (4/3,2/3), (x1B, x2B) = (2/3,4/3)
(0) none of the previous answers is correct (NOPAC).
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