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
The Schrodinger wave equation generalizes the fitting-in-of-waves procedure. The waves that "fit" into the region to which the particle is contained can be recognized "by inspect

define cost its types with curves

draw the demand curve,when there is rise in the price of a product on the demand of the product

data of past 20 years regarding price, wage, employment, productivity, investment, profit or loss.

Problem 1: i) It has often been argued that a monopoly has both costs and benefits. Discuss. ii) Explain, using diagram the short and long equilibrium positions of a monopo

If the inverse demand curve is p=120-Q and the marginal cost is constant at 10, how does charging the monopoly a specific tax of r=10 per unit affect the monopoly optimum and the w

the price of a laptop increases by 20% and there is a 40% drop in the quantity demanded

Employer’s Estimates of Future Manpower Requirements One of the parameters of demand for employment in a firm or a factory or an establishment is the level of capital investme

Strengthening the Financial Instruments - rationale in era of globalisation: With this in view, following suggestions can be made: i) Finance must be conditioned on a poli

Niche Operators: It is assessed by TRAI that despite the USO support, existing big service providers would not be interested to serve about 50 per cent of the villages. To add