Consider an exchange economy with two consumers, A and B, and two commodities x and y. The utility functions and endowments as follows: UA(x, x) = (xA)²YA, WA = (90,0), UB(x, x) = xB (YB)², WB = (0,90). [Subscripts refer to consumers]. Compute the competitive equilibrium and the locus of Pareto efficient allocations for this economy and sketch them in an Edgeworth box.

Consider an exchange economy with two consumers, A and B, and two commodities x and y. The utility functions and endowments as follows: UA(x, x) = (xA)²YA, WA = (90,0), UB(x, x) = xB (YB)², WB = (0,90). [Subscripts refer to consumers]. Compute the competitive equilibrium and the locus of Pareto efficient allocations for this economy and sketch them in an Edgeworth box.

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter2: Systems Of Linear Equations

Section2.4: Applications

Problem 23EQ: 23. Consider a simple economy with just two industries: farming and manufacturing. Farming consumes...

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