Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Macroeconomics Expert

1. Consider an economy in that George and Harriet consume only ale and bread. Georgeís utility function is UG = aG(bG 1) where aG and bG are his consumption of ale and bread. Harrietís utility function is UH = (aH )2 (bH 1) where aH and bH are her consumption of ale and bread. George is endowed with one unit of ale and one unit of bread. Harriet is endowed with two units of bread but no ale. Using aG as an index, Önd all of the Pareto optimal allocations in which George and Harriet consume positive amounts of both goods.

2. Consider an economy consisting of three people: Frida, George and Har-riet. They consume two goods, ale and bread, and their utility functions are UF = (aF )2 bF UG = (aG 1)(bG 1) UH = aH (bH 1) Frida is endowed with one unit of ale and one unit of bread. George is endowed with two units of bread and no ale. Harriet is endowed with two units of ale and no bread.

(a) Find each agentís best attainable commodity bundle.
(b) Find the market-clearing price.
(c) Find the competitive allocation.
(d) How much of which good does each person sell in the competitive equilibrium? How of much of which good does each person buy in the competitive equilibrium?

3. Alice and Bob survive on hamburgers and salads. Aliceís utility function is UA = hA(sA 1) where hA and sA are her consumption of hamburgers and salads respec- tively. Bobís utility function is UB = (hB 1)2 sB where hB and sB are his consumption of hamburgers and salads respec- tively. Let p be the price of hamburgers measured in salads. Alice is endowed with one salad and two hamburgers. Bob is endowed with six salads and two hamburgers. Find the competitive equilibrium.

4. An economy is endowed with one unit of ale and one unit of bread. There are two people in the economy, George and Harriet. Georgeís utility func- tion is UG = aG(bG + 1) where aG and bG are his consumption of ale and bread. Harrietís utility function is UH = aH (bH + 1) where aH and bH are her consumption of ale and bread. Show that the allocation (aG; bG; aH ; bH ) = (1=4; 0; 3=4; 1) is Pareto optimal.

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M91174
  • Price:- $75

Guranteed 36 Hours Delivery, In Price:- $75

Have any Question? 


Related Questions in Macroeconomics

1 part a evaluate the fundamental arguments between

1. (Part A) Evaluate the fundamental arguments between Keynesians and Monetarists concerning the level of government involvement in our economy to minimize the impact and stabilize the different stages of the business cy ...

National hospital is the only employer of nurses in the

National Hospital is the only employer of nurses in the county of Castoria, and it acts as a profit-maximizing monopsonist in the market for nursing labor. The marginal revenue product for nurses is w = 50 2N, where w is ...

Do you agree or disagree with one of the following

Do you agree or disagree with one of the following statements (just need to pick one)? Find an article that supports your claim. Summarize the article and write a short paragraph explaining your opinion. There is no righ ...

Mundell-fleming modelexplain the use of the mundell-fleming

Mundell-Fleming Model Explain the use of the Mundell-Fleming Rule to solve a combination of Unemployment and BOP deficit. Be sure to explain how your policies would fix the imbalances.

Suppose real gdp is currently 125 trillion and potential

Suppose real GDP is currently $12.5 trillion and potential real GDP is $13 trillion. If the president and Congress increased government purchases by $150 billion, what would be the result on the economy if the MPC is .80 ...

In a context of 220 to no more than 250 wordsthe general

In a context of 220 to no more than 250 words: The General Manager (GM) of a car dealership is working on a three-year business plan. The GM expects inflation to rise over the next three years. How will higher inflation ...

Short-run marginal costs for firms a b and c are given by

Short-run marginal costs for firms "A", "B" and "C" are given by SMC = 2qA, SMC = 4qB andSMC = 2qC respectively. Assume that these firms behave under the rules of perfect competition.Using diagrams, derive the market sup ...

Why do we need microeconomicswhat makes perfect competitive

Why do we need microeconomics? What makes Perfect competitive firm efficient market? Explain the elasticity of demand and taxes. Explain increase demand and increase in quantity demanded. What makes pure monopoly an inef ...

Suppose johns utility function is u ln2c where c is the

Suppose John's utility function is U = ln(2C) where C is the amount of consumption John has in any given period. John's income is $100,000 per year and there is a 3% chance that he will be involved in a catastrophic acci ...

In recent years labor economists have had renewed interest

In recent years, labor economists have had renewed interest in the relationship between the job vacancy rate (open but unfilled job postings) and the unemployment rate.  This relationship is commonly represented by the " ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro