Consider an one person, two good, one input economy. This is "Lea's Economy". Lea's utility function is U= x/b y1-1/b where b=4, x denotes her consumption of good X, and y denotes her consumption of good Y. The production function of good X is given by X = 15 Lx and the production of Y is given by Y = 2 Ly?, where Lx and Ly denote respectively the amount of labour used in the production of good X and in the production of good Y. The total amount of labour in the economy is 806. Find the efficient allocation in this economy. Then enter below the amount of good X consumed by Lea when the economy operates efficiently.

Consider an one person, two good, one input economy. This is "Lea's Economy". Lea's utility function is U= x/b y1-1/b where b=4, x denotes her consumption of good X, and y denotes her consumption of good Y. The production function of good X is given by X = 15 Lx and the production of Y is given by Y = 2 Ly?, where Lx and Ly denote respectively the amount of labour used in the production of good X and in the production of good Y. The total amount of labour in the economy is 806. Find the efficient allocation in this economy. Then enter below the amount of good X consumed by Lea when the economy operates efficiently.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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