Consider the following 2-consumer, 2-good exchange economy: u¹(x1, x₂) = (x+x₂)² u²(x,x) = ln x² + 2 ln a R¹ = (18,4) R² = (3,6). a. Characterise the Pareto set as completely as possible. b. Compute the Walrasian equilibrium allocation and verify that it is in the core.

Consider the following 2-consumer, 2-good exchange economy: u¹(x1, x₂) = (x+x₂)² u²(x,x) = ln x² + 2 ln a R¹ = (18,4) R² = (3,6). a. Characterise the Pareto set as completely as possible. b. Compute the Walrasian equilibrium allocation and verify that it is in the core.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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