Illustrate what is the equilibrium quantity of bananas

Assignment Help Business Economics

Reference no: EM1362175

(i) Marilyn and Chen live in an isolated valley and trade with no-one but each other. They consume only bananas and tomatoes. Marilyn has an initial endowment of 4 bananas and 11 tomatoes. Chen has an initial endowment of 20 bananas and 27 tomatoes. For Marilyn, the two goods are perfect substitutes, one-for-one. For Chen, they are perfect complements, one-for-one.

a) Show the endowment situation in an Edgeworth box diagram, with Marilyn on the bottom left corner and Chen on the top right corner.

b) In competitive equilibrium, what is the ratio of the price of bananas to the price of tomatoes?

c) Illustrate what is the equilibrium quantity of bananas and tomatoes consumed by Marilyn and Chen?

Reference no: EM1362175

Questions Cloud

Evaluator as a career choice : Would a career as an evaluator be interesting to you? Why or why not? Support your opinions by referencing sources such as a textbook or internet research. Be sure to cite your sources.

Explain a company you know or read up : Explain a company you know or read up on who did not really develop their strengths or deal with key weaknesses.

Family policy in the united states and france : Explain what policies and systems does France have that you would like to see in the United States?

Research paper - freedom of the press : Present your arguments to support your thesis statement. This should be one to three paragraphs in length.

Illustrate what is the equilibrium quantity of bananas : Illustrate what is the equilibrium quantity of bananas and tomatoes consumed by Marilyn and Chen.

What is the particles direction of motion : An automobile and a truck start from rest at the same instant, with the automobile at first at some distance behind the truck. The truck has a constant acceleration of 2.01.

Explain packet-by-packet fair queueing system-logical buffer : Consider a packet-by-packet fair queueing system with three logical buffers and with service rate of one unit/second. Show the sequence of transmissions for this system.

How culture influences organizational change : How the organizational culture could affect the leadership theories used in an organization and how culture influences organizational change.

Explain the four leadership behaviors of the path-goal : Explain the four leadership behaviors of the Path-Goal theory of leadership and their likely motivational effects on employees.

User Account

All Pages