1/23 (b) An economy consists of just two people. A and B, and there are just twocommodities x and y. A has the utility function x + y ¹/2, and Bhas the utility function 2(x +y¹2). A is endowed with 36 x and no y,B with 9 y and no x.1/2i. Find the set of Pareto efficient allocations and illustrate that set in alabeled Edgeworth box diagram. Show your work.ii.Find the Walrasian equilibrium/equilibria. Show your work.

Pareto efficient allocations refer to those points deviating from which nobody can be made better…

1/2 1/2 3 (b) An economy consists of just two people. A and B, and there are just tw commodities x and y. A has the utility function x +y¹2, and B has the utility function 2(x ¹/2 + y2). A is endowed with 36 x and no B with 9 y and no x. i. Find the set of Pareto efficient allocations and illustrate that set in a labeled Edgeworth box diagram. Show your work.

1/2 1/2 3 (b) An economy consists of just two people. A and B, and there are just tw commodities x and y. A has the utility function x +y¹2, and B has the utility function 2(x ¹/2 + y2). A is endowed with 36 x and no B with 9 y and no x. i. Find the set of Pareto efficient allocations and illustrate that set in a labeled Edgeworth box diagram. Show your work.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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