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
Explain the meaning of the statment "coffee and tea are close substitutes".

You are the CEO of Comchip, a firm that sells specialized computers. Each of the firm's computers contain a unique chip that is produced at Comchip's west coast plant at a cost of

Economies and Diseconomies of Scale -Economies of Scale Increase in the output is greater than increase in the inputs. -Diseconomies of Scale Increase in the

1. "Price discrimination allows a monopoly to increase its economic profit by capturing part of the consumer surplus and turning it into economic profit. Such a situation however l

Find the market-clearing price and quantity of burritos.

draw a PPF when a hurricane slows down the nest two months of butter production?

Differentiate between firm and industry.   A firm is a business unit produced for the purpose of carrying out some kind of trading activity. The term "firm" is used in many ways

What is the difference between decreasing marginal returns and negative marginal returns?


What are the important functions to maximize total surplus? The market equilibrium maximizes total surplus since the market performs four significant functions are as follows: