Find contract curve, Microeconomics

Consider two individuals  M and F who must split 20 units of good X and 10 units of good Y. Suppose we can represent M's preference with the utility function

Um =X^2mYm and Fs preference with the utility

Uf = min{Xf, 2Yf}

Where Xm and Xf indicate their X consumption, while Ym and Yf indicate their Y consumption

a) Derive the MRS for M

b) Interpret F's utility function

c) Find and graph the contract curve

d) What is the ratio of the price of X to the Price of Y in competitive equilibrium?

e) To which allocation will M and F trade? Indicate this outcome clearly in your graph

Posted Date: 2/25/2013 2:02:57 AM | Location : United States







Related Discussions:- Find contract curve, Assignment Help, Ask Question on Find contract curve, Get Answer, Expert's Help, Find contract curve Discussions

Write discussion on Find contract curve
Your posts are moderated
Related Questions
Q. What do you meant by Payroll Tax? Payroll Tax:A tax which is levied on current employment or payrolls (collected either as a fixed amount per employee or as a percentage of

What are the advantages of using mathematics in Modern Economics? Many of the advantages of using mathematics are as follows: a. The “language” used and the explanations of

Determine the Profit-Maximizing Price If a firm targets a 25 % rate of return on sales, and has unit costs of production of $100, what price should it charge if it uses cost-p

Consider the model of corruption explored by Shleifer and Vishni’s where there is one government-produced good X. There is a demand for that good described by the inverse demand eq

Suppose scientists discover that eating soybeans prevents cancer and heart disease. What effect would you predict on the price of soybeans?

COMBINED FINANCES OF UNION AND STATES: Taxes on goods and services are levied in India in various forms and at different levels of Government, Centre, states, and local bodies

discuss the methods used by the malaysian government to slow down import growth.

THEORY OF DEMAND: The  consumer behaviour under indifferencecurve approach where it is assumed that the consumer possesses a utilityfunction. The next most important theory th

The Nature of Policy-Making : It follows that recommending policy must itself be a subjective exercise. The effects of particular-policies at a particular historical juncture

Various studies have concluded that the demand for movie cinema attendance is responsive to advertising.  A study of one company, with movie cinemas in three neighbouring towns, sh