Question 1

Suppose that the two persons in an exchange economy (A and B)have utility functions given by $\begin{array} { l } 
U _ { A } = x + 2 y \
U _ { B } = \sqrt { x y }
\end{array}$ Along the contract curve,B's ratio of Y to X will be

Accepted Answer

The answer of Suppose that the two persons in an...

Question 2

In an exchange economy A's utility is given by U_A = x + y And B's by U_B = min[x,2y]. The initial endowment for A is x = 10 y = 8 and for B,x = 8 y = 4.To reach the contact curve,these individuals must

Accepted Answer

The answer of In an exchange economy A's utility is...

Question 3

Suppose two individuals in an exchange economy have identical utility functions given by $U ( x , y ) = \sqrt { x y }$ Person A has an endowment of x = 9 y = 8,person B has one of x = 16 y = 2.The price ratio that will prevail in equilibrium is

Accepted Answer

The answer of Suppose two individuals in an exchange economy...

Question 4

In a two-good exchange economy,A's utility is given by $U _ { A } = x ^ { 1 / 3 } y ^ { 2 / 3 }$ and B's utility by $U _ { B } = x ^ { 2 / 3 } y ^ { 1 / 3 }$ 
Along the contract curve x/y for B will be times x/y for A.

Accepted Answer

The correct answer is A because the marginal rate of substitution (MRS) for A is equal to the MRS for B along the contract curve. The MRS for A is equal to $\frac { d y } { d x } = \frac { y } { 3 x ^ { 2 / 3 } y ^ { 1 / 3 } } = \frac { y ^ { 2 / 3 } } { 3 x ^ { 2 / 3 } }$, and the MRS for B is equal to $\frac { d y } { d x } = \frac { y } { 3 x ^ { 1 / 3 } y ^ { 2 / 3 } } = \frac { y ^ { 1 / 3 } } { 3 x ^ { 1 / 3 } }$. Therefore, the MRS for A is equal to 4 times the MRS for B, so x/y for B will be 4 times x/y for A along the contract curve.

Quiz 11: General Equilibrium and Welfare

Suppose that the two persons in an exchange economy (A and B) have utility functions given by $\begin{array} { l } U _ { A } = x + 2 y \\U _ { B } = \sqrt { x y }\end{array}$ Along the contract curve,B's ratio of Y to X will be

In an exchange economy A's utility is given by U_A = x + y And B's by U_B = min[x,2y]. The initial endowment for A is x = 10 y = 8 and for B,x = 8 y = 4.To reach the contact curve,these individuals must

Suppose two individuals in an exchange economy have identical utility functions given by $U ( x , y ) = \sqrt { x y }$ Person A has an endowment of x = 9 y = 8,person B has one of x = 16 y = 2.The price ratio that will prevail in equilibrium is

In a two-good exchange economy,A's utility is given by $U _ { A } = x ^ { 1 / 3 } y ^ { 2 / 3 }$ and B's utility by $U _ { B } = x ^ { 2 / 3 } y ^ { 1 / 3 }$ Along the contract curve x/y for B will be times x/y for A.

Quiz 11: General Equilibrium and Welfare

Suppose that the two persons in an exchange economy (A and B) have utility functions given by UA=x+2yUB=xy\begin{array} { l } U _ { A } = x + 2 y \\U _ { B } = \sqrt { x y }\end{array}UA​=x+2yUB​=xy​​ Along the contract curve,B's ratio of Y to X will be

In an exchange economy A's utility is given by UA = x + y And B's by UB = min[x,2y]. The initial endowment for A is x = 10 y = 8 and for B,x = 8 y = 4.To reach the contact curve,these individuals must

Suppose two individuals in an exchange economy have identical utility functions given by U(x,y) =xyU ( x , y ) = \sqrt { x y }U(x,y) =xy​ Person A has an endowment of x = 9 y = 8,person B has one of x = 16 y = 2.The price ratio that will prevail in equilibrium is

In a two-good exchange economy,A's utility is given by UA=x1/3y2/3U _ { A } = x ^ { 1 / 3 } y ^ { 2 / 3 }UA​=x1/3y2/3 and B's utility by UB=x2/3y1/3U _ { B } = x ^ { 2 / 3 } y ^ { 1 / 3 }UB​=x2/3y1/3 Along the contract curve x/y for B will be times x/y for A.

Suppose that the two persons in an exchange economy (A and B) have utility functions given by $\begin{array} { l } U _ { A } = x + 2 y \\U _ { B } = \sqrt { x y }\end{array}$ Along the contract curve,B's ratio of Y to X will be

In an exchange economy A's utility is given by U_A = x + y And B's by U_B = min[x,2y]. The initial endowment for A is x = 10 y = 8 and for B,x = 8 y = 4.To reach the contact curve,these individuals must

Suppose two individuals in an exchange economy have identical utility functions given by $U ( x , y ) = \sqrt { x y }$ Person A has an endowment of x = 9 y = 8,person B has one of x = 16 y = 2.The price ratio that will prevail in equilibrium is

In a two-good exchange economy,A's utility is given by $U _ { A } = x ^ { 1 / 3 } y ^ { 2 / 3 }$ and B's utility by $U _ { B } = x ^ { 2 / 3 } y ^ { 1 / 3 }$ Along the contract curve x/y for B will be times x/y for A.