2. Assuming Bart and Homer barter (no pun intended), highlight the area of allpost-trade allocations both of them prefer to their initial endowment.3. What determines which particular post-trade allocation they end up with?Marge observes what is going on and intervenes. She (acting as the"Government' in our example) decides that Bart should not have any beer. Shemakes a lump-sum transfer leading to new initial endowments for Bart (0,21)and Homer (38,0).4. In your Edgeworth box show the new initial endowments after the lumpsumtransfer imposed by Marge. Label this poișt e2. (1 point)5. After Marge's transfer mark one new possible post-trade allocation (Labelthis point f.) and draw the associated indifference curves for Bart and Homer.(1 point)6. Did Marge succeed in her mission to not let Bart have any beer? Why or whynot?7. Add the contract curve to your Edgeworth box.8. What do all points on the contract curve have in common? Question 9 General EquilibriumBart and Homer have beer and skateboards. As their initial endowment Bart has(8,20), Homer has (30, 1). Assume their utility functions have the usualproperties (diminishing marginal utility for both goods, 'more-is-better' - in thatsense Bart is like his dad: he can never have enough!!) and each of their utilitiesdoes not depend on the quantity consumed by the other person.1. Draw an Edgeworth box. Put beer on the x axis and skateboards on the yaxis; and Bart in the left-lower corner. Show their initial endowments (labelthis point e) & their initial indifference curves.Label everything andDRAW IT LARGE so you can fit in all your answers to the following questions!

Answered: the new initial sfer imposed by Marge.…

the new initial sfer imposed by Marge. Label this noizt

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Explain that ''A price change isnot necessarily always in the contractor’s favor''?
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ent-4.docx cetumentGrp Assignment 4. Saved to this Pd v Layout References Mailings A A™ | Aa- | Ap -I A. DA = = = |- |- B demand. daho Review if necessary. Paragraph View ENT Help For a particular video game, the company sells 160 (thousand) copies of the game when the (thousand) copies of the game. price of the game is $55. However, when they change the price to $45, the company sells 240 1 AaBhCcDdi AaBbCcDdi AalbC Đới 1 List Para... Normal 1 No Spac.... Styles a. As part of the process of finding the price elasticity of demand, what is the percent change in quantity using the midpoint method? Round your answer to 4 decimal places ECON 150: Microeconomics b. As part of the process of finding the price elasticity of demand, what is the percent change in price using the midpoint method? Round your answer to 4 decimal places if necessary. C. Using parts a and b, calculate the price elasticity of demand. Round your answer to 2 decimal places if necessary. Four