On the Edgeworth production box plot, what conditions must be met for an allocation to be on the production contract curve? Why is there a competitive equilibrium on the contract curve?
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On the Edgeworth production box plot, what conditions must be met for an allocation to be on the production contract curve? Why is there a competitive equilibrium on the contract curve?
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- if good F and G are substitutes and the cost of a factor of production used in the production of good F increases, then the price ofIs point E Pareto efficient allocation? Explain your answer.Graphically show the effect of an increase in the cost of the tomato sauce on the equilibrium price and output in the market for pizza.
- Show that when all consumers and producers are price takers, a competitive equilibrium is always Pareto optimal.The following graph plots a supply curve (orange line) for several sellers in the market for motor scooters in State College, a university town in Pennsylvania. Each seller has a single motor scooter for sale. The market price of motor scooters is given by the horizontal black line at $70. Each rectangle on the graph corresponds to a particular seller in this market: blue (circle symbols) for Shen, green (triangle symbols) for Valerie, purple (diamond symbols) for Antonio, tan (dash symbols) for Caroline, and orange (square symbols) for Dmitri. (Note: The name labels are to the right of the corresponding segment on the supply curve.) Use the rectangles to shade the areas representing producer surplus for each person who is willing to sell a motor scooter at a market price of $70. (Note: If a person will not sell a motor scooter at the market price, indicate this by leaving their rectangle in its original position on the palette.) PRICE (Dollars per motor scooter) 160 140 120 100 80 60…A two-good economy is in a competitive equilibrium. The price of a piece of candy is $2 andthe price of a desk is $12. The marginal cost of candy is given by MCc = 2Qc and the marginalcost of a desk is MCd = 4 + 4Qd. The current production level of candy is one piece. What is theoutput of desks? A) Qd = 1B) Qd = 2C) Qd = 4D) Qd = 5
- Dear tutor, please solve these True/False Questions. Thank You! Can it be efficient for one trader to consume all units of the goods while the other trader consumes nothing? In other words, does this point lie on the contract curve? A competitive equilibrium is not Pareto efficient if some members of society are unable to afford a necessary good.What is the cost of operations in the factors of production determines the price such organizations quote on the market?Consider the labor market in an imaginary coastal town called Nutsland. There is only one buyer in that market, namely Nutsland Farm that operates with a production function of Q= L- The supply of labor is given as L=w-2, where w is the wage. On the output side, Olive Farm takes the price P =20 TL/kg for its olive oil as given due to intense competition in that market. a. Find Olive Farm's profit-maximizing labor demand. What wage does it have to pay? b. What would be the wage in Nutsland if the market were competitive? c. Compare the welfare implications of a) versus b). Calculate the deadweight loss and show it on a graph.