Exchange economy with two consumers and two goods

Assignment Help Business Economics

Reference no: EM131094738

Consider an exchange economy with two consumers and two goods. The consumption sets of the consumers are R_+^2. Each consumer has the same utility function u(x_1,x_2) = min{x_1, x_2}. Provide a complete characterization of all the allocations which are in the core of this economy for all possible values of the initial endowments. (Recall that an allocation is in the core if it is i) Pareto optimal and ii) Individually rational (weakly preferred to the endowment))

Reference no: EM131094738

Questions Cloud

Evaluate the effectiveness of the training experience : Training is maximized when leaders set clear expectations for learners, use techniques for reinforcing learning during training, and take steps to ensure that the desired performance is maintained after training. First, briefly describe one of your j..

Higher steady-state growth rate of total output : In a slow growth model of an economy with population growth but no technological change, which of the following will generate a higher steady-state growth rate of total output?

How much output will each firm produce : Suppose there are n number of identical firms in a market. Each firms cost function is given by C = 648 + 8q^2, where q is the amount that an individual firm produces. This means that an individual firm's marginal cost is given by MC = 16q. How much ..

Discuss on how during period of financial crisis : Discuss on how during a period of financial crisis when funds cannot be raised easily or quickly, the fundamental values of some assets can depart from market prices. Explain how this relates to the distinction between loans and securities. Identify ..

Exchange economy with two consumers and two goods : Consider an exchange economy with two consumers and two goods. The consumption sets of the consumers are R_+^2. Each consumer has the same utility function u(x_1,x_2) = min{x_1, x_2}. Provide a complete characterization of all the allocations which a..

Marginal cost equals average variable cost when output : A competitive firm has the following short-run cost function: c(y) = y3 - 8y2 + 30y + 5. What is the firm’s marginal cost function? What is the firm’s average cost function? Marginal cost equals average variable cost when output is ----.

Economy the expectations-augmented philips curve : In a certain economy the expectations-augmented Philips curve is: Π = Πe - 2(u-u*) u* = 0,06 (natural rate of unemployment)

Asymmetric information and two types on consumers : Consider the basic Rothschild-Stiglitz model with asymmetric information and two types on consumers. A policymaker who has taken this class suggests that is might be beneficial to impose a flat tax on healthy people and distribute the tax revenue to ..

Two-part tariff by charging a price for membership : Consider a local golf course that prices using a two-part tariff by charging a price for membership and then charging per round of golf played. Individual demand for rounds of golf is given along with the corresponding marginal revenue curve.

User Account

All Pages