Consider an economy with two people who have the utility functions and initial endowments given below: 2x11 + x12 U₂ = x21 + 2x22 U1 = W1 = W2 = a. Solve for a competitive equilibrium. b. Show that MRS person 1 = competitive equilibrium. c. Is the competitive equilibrium allocation Pareto optimal? Why? MRS person 2 doesn't hold at the
Q: To discourage the consumption of a product, the government should impose a tax on the consumers…
A: Taxes are the payments made to the government when a consumers purchase a product. Taxes increase…
Q: A firm faces the demand schedule q = 400 - 2p - p². What price does it need to charge to sell 100…
A:
Q: What is single tax system? Write its merits and demerits.
A: A multiple tax system is a combination of different tax systems in which a variety of different tax…
Q: Persons whose influence on others is limited to the appointed managerial authority of their…
A: According to Bartleby guidelines we can only answer first part of the questions. You can post second…
Q: Economics Suppose that in some country A banks proportionally adjust their deposit and loan rates…
A: Answer: False
Q: Which of the following are considered money in the U.S. economy? Which are not? Explain your answers…
A: The three functions of money are unit of account, medium of exchange and store of value. Unit of…
Q: Write True or False and explain briefly 1- Consider a firm in a perfectly competitive market.There…
A: Note:- Since we can only answer one question at a time, we'll answer the first one. Please repost…
Q: Suppose a municipal water utility must pay $360,000 per month for its quasi-fixed capital inputs,…
A: Long Run Average Cost refers to the cost per unit of output produced in the long run by a firm or…
Q: Thandi has R700 to spend on hamburgers and transport. A humburger costs R35 while a car trip is R25.…
A: The budget line implies the combination of two goods that consumers can buy at the given income and…
Q: You borrow P20,000 from a family member and agree to pay it back in 6 months. Because you are part…
A: Simple interest is a method of calculating interest that ignores the impact of compounding.Simple…
Q: What are some measures to remove the defects of Indian money market?
A: Introduction - When compared to advanced markets such as New York and London Money Markets, the…
Q: E4 In a competitive market, the market demand is Qd = 60 −6P and the market supply is Qs = 4P. A…
A: The price ceiling is a price cap which states the highest point at which goods and services could be…
Q: Which of the following would most likely create the setting for an Oligopoly ? A. The government…
A: An oligopoly is a market structure in which a few, sizable firms control all or almost all of the…
Q: 1.Which of the following ideas were central to Adam Smith in Wealth of Nations? A)importance of…
A: As per the policy, we will answer first three sub parts. If you want other questions to be solved,…
Q: why is becoming suppliers for foreign firms a good stragey when evnte
A: Market entry techniques are strategies organizations use to design, disperse and convey products to…
Q: Just clarify "tariffs on a variety of American exports..." to identify who is imposing these…
A: Tariff is a type of trade barrier used by the government to protect its producer or influence price…
Q: The table below shows the marginal cost for three firms to clean up units of pollution. Net Cost for…
A: Marginal Abatement Cost:- The expense of mitigating negative externalities like pollution is known…
Q: 1. Income inequality and the poverty rate The following table summarizes the income distribution for…
A: At a microeconomic level, inequality increments weakness and well-being spending and decreases the…
Q: If the AD excess is $300 billion and the MPC is 0.75, Instructions: Round your responses to one…
A: The percentage of money that a person spends on satisfying their consumption needs is known as MPC,…
Q: sing the macroeconomic environment of a bank explain if the economic environment enables an increase…
A: The macro-environment alludes to how the macroeconomic circumstances in which an organization or…
Q: -09 k You just got closed out of an economics course you need to graduate and need to persuade the…
A:
Q: (b) Assume that year 2020 is the base year. There are only two goods produced domestically and the…
A: Inflation means general increase in price level in the economy.
Q: The basic difference between macroeconomics and microeconomics is that: O A. microeconomics is…
A: Microeconomics is considered to be the study of households, individuals and firms and their role in…
Q: Switching between different depreciation methods: - Switching from one depreciation method to…
A: Subsequently, the technique for deterioration can be changed without review impact or with review…
Q: If the monopolist produces at the profit maximizing rate of output, what will be the total revenue?…
A: Total revenue refers to the total amount of revenue earned by a firm through the sales of goods…
Q: 24. From a macro perspective, high income, mass-producing nations (such as the United States and…
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…
Q: You are willing to pay $25 (but not a penny more) for a half-hour massage. At the end of your…
A: In the mentioned question we have been asked about the total utility and consumer surplus. Given for…
Q: (in thousands) Refer to the above Figure 15 which shows cost curves, a marginal revenue (MR) curve…
A: Monopolistic competition is the market structure in which there are large number of sellers selling…
Q: The demand for a commodity is given by Q = B₁ + B₁P+u, where Q denotes quantity, P denotes price,…
A: A solution that comprises many variables that are connected by multiple formulas is known as a…
Q: Do answer quickly asap
A: Changes in market condition will have a significant impact on a producer's producing and selling…
Q: per capita, real U.S. dollars (2000) $50,000 40,000 30,000 20,000 10,000 5,000 1,000 Nigeria Liberia…
A: Involving GDP as a proportion of monetary government assistance or way of life in a nation is…
Q: Consider this profit-maximizing firm competing in a perfectly competitive market with a market price…
A: When there are many buyers and sellers, there is perfect competition. At prices set by the market,…
Q: What is meant by economy of scope and how does Starbucks use it?
A: Starbucks has a strong brand name for coffee retail on the high street. It took the decision to…
Q: Select the strategy the firm is utilizing. Know the Future, Inc. is able to charge each customer…
A: Price discrimination is the pricing strategy used by firms to maximize their profit and generate…
Q: Which is not an example of asymmetric information? Group of answer choices A customer not knowing…
A: Asymmetric information involves two parties entering into a contract where one party has more…
Q: An equipment costs P4433082 with the estimated salvage value of P542566 at the end of 10 years. What…
A: Given The first cost of the equipment (P)= P4433082 Salvage value (F)=P542566 Life of the equipment…
Q: Question 22 Consider the following Cournot duopoly. Both firms produce a homogenous good. The demand…
A: We have duopoly model with asymmetric information about the marginal cost of firm 2.
Q: A company is considering two pieces of equipment. Equipment A has a first cost of $80,000, AOC of…
A: The Annual Worth method is often used when comparing alternatives. As per annual worth, all receipts…
Q: Consider an economy that produces and consumes bread and automobiles. The table includes data for…
A: Nominal GDP is that GDP which are measured on current year price level on the other Real GDP is that…
Q: Monopolistically competitive firms use product differentiation to a.limit the number of firms in the…
A: In monopolistically competitive market, the sellers sell differentiated products which are close…
Q: A new batch of college graduates enter the workforce boosting the labor productivity of corpor…
A: Aggregate demand is the total spending on domestically made goods and services in an economy.…
Q: The municipality of Smallville has arranged to borrow Php30 million in order to implement several…
A: The present value of the loan is $30 M and it is repaid through $5 M annual installments at 3% rate…
Q: The .......... demand for money arises out of the need to hold money as a medium of exchange . This…
A: Money is a commodity that serves as a medium of trade and a store of value, according to economic…
Q: Which statement is true? O An increase in the tax on interest rate income increases the supply of…
A:
Q: Economics explain the profit maximizing level of output and profit in organic growth?
A: Organic growth: It refers to the growth of the business under which the business will try to…
Q: A company can sell its product in two separate market defined by the following inverse demand…
A: The elasticity of demand is the reaction of demand due to change in price of goods and services,…
Q: True or False: Every finite extensive-form game of imperfect information admits at least one…
A: Answer: The correct option is (False). Explanation: The game of chicken is a well-known illustration…
Q: As discussed in class, when a single firm sells two complementary goods, they should lower their…
A: Substitute goods are two items that may be swapped for one another, such as tea and coffee. When the…
Q: 1. The table below shows the income distribution of a hypothetical village where the poverty line is…
A: It is called Foster - Greer -Thorbecke index. And this index is used to measure the severity of the…
Q: Hi! i need help making a cause and effect diagram about Sdg # 7: Ensure access to affordable,…
A: The problem is that many people do not have access to affordable, reliable, sustainable and modern…
urgent..solve all parts..hand written plz
Step by step
Solved in 3 steps
- Come up with an example with four agents and four items in which there is only one Pareto efficient allocation16.11. Ted and Joe each consume peaches, x, and plums, y. The consumers have identical 10y7x7, MRS = 10yr^TTogether, they have 10 peaches MRSJoe utility functions, with and 10 plums. Verify whether each of the following allocations is on the contract curve: a) Ted: 8 plums and 9 peaches; Joe: 2 plums and 1 peach. b) Ted: 1 plum and 1 peach; Joe: 9 plums and 9 peaches. %3DTwo individuals, Fred and Helen, are in an economy with no production, and each have the utility function U = 10XY. Prices of both X and Y are set at $1. Initial endowments for Fred are 10 units of X and 6 units of Y. Helen has 8 units of X and 12 units of Y. Find the general equilibrium prices and allocation, then show that the G.E. allocation is Pareto efficient.
- 6. In an Edgeworth box for two consumers, A and B, with endowments of commodities Xa and d Ya are A's endowments, Xb and Yb are B's, and Xo = Xa + Xb, Yo = Ya + Yb), the competitive equilibrium allocation of the two commodities represents a mutual tangency of both consumers' indifference curves with each other and with a common budget line. (b) Suppose MRSa = Ya/Xa, MRSb = Yb/Xb, Xa = 10, Ya, = 100, Xb= 50, Yb = 20, and let good Y be the numeraire (Py = 1). Verify that the competitive equilibrium price is Px = 2.9. Consider an Edgeworth box economy with two consumers, whose utility func- tions and endowments are e' = (5,5) 2 = (5,5) In the following, use the normalization p2 = 1. (a) Find the competitive equilibrium price. (b) State the first fundamental theorem of welfare and verify that it holds in this economy. (e) Consider the allocation ã = (x',) = (2,3), (8, 7). Show whether this allo- cation can supported as an equilibrium with transfers. (d) State the second fundamental theorem of welfare, and briefly discuss whether the result in part (c) conform with or violate this theorem.John and Belle consume only two goods, x and y. They have strictly convex preferences and no kinks in their indifference curves. At the initial endowment point, the ratio of John's marginal utility of x to his marginal utility of y is J and the ratio of Belle's marginal utility of x to her marginal utility of y is B, where ] B. b. C < J. c. C = J. d. C = B. e. JTwo consumers, Budi and Marry, together have 10 apples and 4 oranges. a. Draw the Edgeworth box that shows the set of feasible allocation for the two individuals and two goods b. Suppose Budi has 5 apples and 1 orange, while Marry has 5 apples and 3 oranges. Identify this allocation in the Edgeworth box c. Suppose Budi and Marry have identical utility functions and assume that this utility function exhibits positive marginal utilities for both apples and oranges and a diminishing marginal rate of substitution of apples and oranges. Could the allocation in part (b) be economically efficient?John and Belle consume only two goods, x and y. They have strictly convex preferences and no kinks in their indifference curves. At the initial endowment point, the ratio of John's marginal utility of x to his marginal utility of y is J and the ratio of Belle's marginal utility of x to her marginal utility of y is B, where J B. b. C < J. c. C = J. d. C = B. e. JConsider a society consisting of just a farmer and a tailor. The farmer has 30 units of food but no clothing. The tailor has 60 units of clothing but no food. Suppose each has the utility function U=Fc, If the price of clothing is always $1, and the food price is currently $1, then we can conclude O the market is at a competitive equilibrium. the price of food will drop towards a contitive equilibrium. the price of food will increase towards a competitive equilibrium. O None of the above..3. Anita (A), Ben (B) and Carlos (C) are housemates who have moved to a new house and must decide how to allocate rooms X, Y and Z. An 'allocation' is where each housemate is assigned to exactly one room. For example, Anita → Room Z, Ben → Room X and Carlos → Room Y is allocation (Z, X, Y). Utilities for each room are given below: Room X Utility for A 7 Utility for B 9 Utility for C 2 Room Y 4 3 7 Room Z 2 1 46. In an Edgeworth box for two consumers, A and B, with endowments of commodities Xa and d Ya are A's endowments, Xb and Yb are B's, and Xo = Xa + Xb, Yo = Ya + Yb), the competitive equilibrium allocation of the two commodities represents a mutual tangency of both consumers' indifference curves with each other and with a common budget line. (a) The conditions require that A and B consume at a point on their budget lines where their indifference curves have the same marginal rate of substitution. and equilibrium for the market as a whole requires that the sum of the individuals' demands for each commodity must equal the totals (Xo and Yo) available. Mathematically express the point of equilibrium, that is, express the above statement with equations in relating each endowments, equilibrium points (Xa, Xb, Ya, Yb), and totals ((Xo, Yo).Kindly help on these two question... The result that every competitive equilibrium is pareto efficient. a) the second fundamental theorem of welfare economics. b) Edgeworth's condition c) The first fundamental theorem of welfare economics d) Waras's law 2) Assume that there are two consumers ( A and B) in an economy that have preferences that can can be represented as cobb-douglas utility functions. Also assume that there are two firms that have concave production possibility frontiers over goods x and y . Which of the following conditions must be true for an allocation to be distributivity efficient? Select all that apply. a) all goods in the economy are consumed. b) producers must be operating on their production possibilities frontier. c) all consumers must have marginal rates of substitution that are equal. d) all producers must have marginal rates of transformation that are equal . e) consumers must value goods at the margin at the same rate it costs society to produce themSEE MORE QUESTIONSRecommended textbooks for youPrinciples of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSONPrinciples of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-…EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill EducationPrinciples of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSONPrinciples of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-…EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education