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

Ask an Expert

Your posts are moderated

Write your message here..

Related Questions

ECONOMICS OF UNCERTAINITY WITH EXAMPLE, economics of uncertainty with examp... economics of uncertainty with examples

Demand, #questASSIGNMENT #1 The demand function for Product X is given by: ... #questASSIGNMENT #1 The demand function for Product X is given by: Qdx = 80- 2Px- 0.05P²x -0.2Py + 4Pz + 0.01I+ 2A Where: Px Price of good X $120.00 Py Price of related good y $100

Distinction between cost and expenditure, Distinction Between Cost and Expe... Distinction Between Cost and Expenditure As has already been defined, cost is the money equivalent of material and human resources needed to produce a good or a service. Expen

Theory of consumers behaviour, derive PCC for complementary goods derive PCC for complementary goods

Change in consumer surplus, a. Generally, there will be a difference betwe... a. Generally, there will be a difference between the CV and the EV. Why? b. The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it

What are the differentiated conditions of economic issue, What are the diff... What are the differentiated conditions of economic issue? While discussing an economic issue, this is very important to differentiate between: (a) Two types of conditions: e

#production possibility schedule.., #i need more light about it.. #i need more light about it..

Oligopoly, what are the factors causing oligopoly market? what are the factors causing oligopoly market?

International monetary fund, International Monetary Fund: The Internat... International Monetary Fund: The International Monetary Fund (IMF), the World Bank and the International Trade Organisation were conceived at the Brettonwoods Conference in Ju

Normal profit, Normal profit: Normal profit is when total revenue is e... Normal profit: Normal profit is when total revenue is exactly equal to total cost when the latter includes both explicit costs. It is the type of profit when made by firms in