Consider a two-people, two-goods exchange economy, where Person A and Person B have the following utility functions. In whichcase, the Pareto optimal allocation can be on the boundary of the Edgeworth box?Note: Do not consider the origins as the boundary points. (Boundary points are the edges of the Edgeworth box except for theorigins.)0 UA = min (XA1, XA2) and Ug = Xg1.Xg2(i) UA = log(xA1) + log(Xa2) and ug = 3Xgt + X82(ii) uA = (XA1) 0XA) and ug = 3log(Xgy) + X82%3!(iv) uA = (XA1)2 + XA2 and ug = log(xa1) + Xe2

Utility function is described as a function which tells us about the level of satisfaction achieved…

Answered: Consider a two-people, two-goods…

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Consider the pure exchange economy with 2 goods, good 1 and good 2, and two consumers, consumer A and consumer B. The consumers have the following utility functions: UA(X1A,X2A)=X1A+3x2A; UB(X1B,X2B)=x1B +X2B. Consumer A is initially endowed with 4 units of good A and no unit of good 2, that is, consumer A's initial endowment is (W1A,W2A)=(4,0). Consumer B is initially endowed with 3 units of good 2 and no unit of good 1, that is, (WIB,W2B)=(0,3). In order to implement the allocation (x1A,X2A)=(0,1), (x1B,X2B)=(4,2) as a Walrasian equilibrium, what transfer of wealth should we make between the consumers if good 1 is the numeraire, that is, if p1 =1? O a. An amount 7 of wealth should be transferred from consumer A to consumer B. O b. None of the other answers. An amount 3 of wealth should be transferred from consumer A to consumer B. O c. d. An amount 3 of wealth should be transferred from consumer B to consumer A. An amount 7 of wealth should be transferred from consumer B to consumer…
Suppose you find that MU1(X1Xx2)=2x2 and MU₂(x1+x₂)=2x1. What is the rate at which the consumer is willing to trade good 2 for good 1 at bundle (2,4)? (Note: enter a positive number, i.e. enter the quantity of good 2 that the consumer is willing to give up for an additional-marginal-unit of good 1.) Question 20 Suppose you find that the expressions of the marginal utilities for a consumer are given by MU1 (1,2)= 2 and MU₂ (1,2)= 7. Then you can conclude that: This consumer has Cobb-Douglas tastes For this consumer good 1 and good 2 are perfect complements For this consumer good 1 and good 2 are perfect substitutes None of the above Question 21 Suppose a consumer is always willing to give up 5 units of good 2 for an additional unit of good 1. For this consumer: Good 1 and good 2 are perfect complements Good 1 and good 2 are perfect substitutes Good 1 and good 2 are both essential goods None of the above
Consider a pure exchange economy with two goods k = 1,2 and two households i = A, B. The total available amount of good 1 and 2 is 9 and 12 units, respectively. Utility functions for households A and B are UA (TA1, A2) = TA1TA2 and UB(B1, B2) = XB1T32. (a) Find an expression for the Pareto optimal set. (b) Assume e A = (4,4) and eg (5,8) are A and B endowments, respectively. Find the competitive equilibrium. (c) Is the competitive equilibrium allocation in the Pareto Optimal set? Why this result should not surprise us?
Please teach not just solve
For the case of two goods, give examples of different two utility functions that satisfy all of the following properties: (i) one utility is strictly concave in good 1 and the other is strictly convex in good 2; (ii) they represent the same preferences; and (iii) one utility function is homogeneous of degree 2.

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