Suppose Lan's utility function is U₁(x,y) =x₁y₁¹⁰ and Dan's utility function is Up(x,y) =xD³yD³, where x; and y; denote respectively the amount of good X and of good Y consumed by person i, i=L, D. A total of 44 of each good is available and it is to be divided efficiently between Lan and Dan. How many units of good Y should Lan get if we give Dan 14 units of good Y such that the allocation is efficient?

Suppose Lan's utility function is U₁(x,y) =x₁y₁¹⁰ and Dan's utility function is Up(x,y) =xD³yD³, where x; and y; denote respectively the amount of good X and of good Y consumed by person i, i=L, D. A total of 44 of each good is available and it is to be divided efficiently between Lan and Dan. How many units of good Y should Lan get if we give Dan 14 units of good Y such that the allocation is efficient?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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