What is the equilibrium allocation

Assignment Help Business Economics

Reference no: EM13160372

In a two-good (X1 and X2), two-person (Sue and Joe) economy, the initial endowments are \(X_{1}^{s} = 3, X_{1}^{J} = 7, X_{2}^{J} = 4\)

The contract curve is the diagonal straight line going from Sue's origin to Joe's. The prices are P1 = 2 and P2 = 3.

Draw this Edgeworth box with the contract curve and label the endowment point

What is the value of Sue's and Joe's endowments?

Draw the budget line on the Edgeworth box through the endowment point

What is the equilibrium allocation?

Reference no: EM13160372

Questions Cloud

Specify the organic solvent and aqueous : Using a flow diagram, show the separation of a mixture containing p-bromoacetanilide, N-cyclopentyl-N-methyl-N-propylamine (N means the group is attached to the nitrogen of the amine) and m-nitrophenol. Specify the organic solvent and aqueous

Calculate the amount of heat liberated : Calculate the amount of heat liberated (in kJ) from 293 g of mercury when it cools from 79.0°C to 14.0°C.

Is world welfare higher or lower : Explain how this tax affects the welfare of foreign consumers and producers. Is world welfare higher or lower? Explain.

State the level of materiality as immaterial and material : Identify which of the conditions requiring a modification of or a deviation from an unqualified standard report is applicable.

What is the equilibrium allocation : Draw the budget line on the Edgeworth box through the endowment point. What is the equilibrium allocation?

Calculate the maximum data rate in mb/second : b)How much cylinder skew is needed for an Oceangate disk operating at 20,000 rpm(new series for the Christmas promotions) which has a seek time of 0.5 milliseconds? This disk has 800 sectors of 512 bytes each on each track.

What reagent could be used to reduce nitro : What reagent could be used to reduce both the nitro and ketone functional groups in a single reaction?

What is the temperature of the water : A sealed glass jar has a small amount of water on the bottom. The rest of the volume in the jar is taken up by helium gas at a partial pressure of 526 Hg, and water vapor. If the total pressure inside the jar is 760. mmHg, what is the temperature ..

Draw the hick''s income and substitution effects : Draw the Hick's income and substitution effects for c1,c2 in c1,c2 space if the interest rate decreases to .05.

User Account

All Pages