Aisha and robin consume only food and clothing figure 1

Assignment Help Econometrics

Reference no: EM13375678

Aisha and Robin consume only food and clothing. Figure 1 below depicts the consumption possibilities for these two consumers.

Point X is the endowment point showing an initial distribution of food and clothing between the consumers.

Point P shows a budget constraint reflecting the price of food in terms of clothing.

UA and UR are indifference curves for Aisha and Robin respectively.

1630_Indifference maps and budget constraint for Aisha and Robin.png

Figure 1: Consumption possibilities, indifference maps and budget constraint for Aisha and Robin

Based on Figure 1, say:

What do points A and B identify in terms of consumption for each person?

Why is neither point A nor B on the contract curve?

Which good is in excess demand? Explain your answer.

Draw a box diagram, based on Figure 1, to show how the price of food relative to clothing must change to bring about a Pareto optimal equilibrium.

Draw a separate box diagram to show what the contract curve might look like if Aisha was concerned about very low consumption of food and clothing by Robin, but Robin was only concerned about his own consumption.

Reference no: EM13375678

Questions Cloud

Cnsider the following demand curve faced by a monopolistq : consider the following demand curve faced by a monopolistq 112000 - 500p 5mnote p per unit price q number of units

A pharmaceutical company has a patent on a lung cancer : a pharmaceutical company has a patent on a lung cancer treatment drug that gives them a monopoly over thenbsp

1 sweaters are produced using machines and labour the : 1 sweaters are produced using machines and labour. the following table shows the isoquants associated with producing

Problem 1 using assignment 3s production for joes pizzeria : problem 1 using assignment 3s production for joes pizzeria we have the following table. assume the wage rate for labor

Aisha and robin consume only food and clothing figure 1 : aisha and robin consume only food and clothing. figure 1 below depicts the consumption possibilities for these two

A select a firm or industry in the leisure tourism or : a select a firm or industry in the leisure tourism or hospitality sector-examples include a travel agency a holiday

What are the highest and lowest payments from the writer : what are the highest and lowest payments from the writer that the beekeeper- farmer team will accept for the sixth

Question 1explain and illustrate with diagrams the : question 1explain and illustrate with diagrams the differences between diminishing marginal returns and decreasing

Please can you explain me the concept of gdp and its : please can you explain me the concept of gdp and its importance for the real estate industry? explain for economic

User Account

All Pages