Find contract curve, Microeconomics

Consider two individualsĀ  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
Meaning of absolute cost difference and comparative cost difference.

explain the relationship between scarcity,choice and opportunity cost


What would be a factor that would make the prospects hopeful for overcoming the demand for resources in the future

5 stratgies that can be used to regulate skilled labour in developing countries

Point Elasticity of Demand - For large price changes (such as 20%), value of elasticity will depend upon where price and quantity lies on demand curve. - Point elasticity me

When the demand function is 2Q - 24 + 3P = 0, find the marginal revenue when Q=3.

Explain the term Laissez-Faire The term "laissez-faire" is used to explain an economic system where the government intervene as little as possible and leave the private sector

P=140-4Q mc1=20+30q for plant 1 mc2=80+10q for plant 2 how many units should be produced by plant 1 and plant 2 to maximise profit for this monopoly?

How is microeconomics differed from macroeconomics? Microeconomics focuses onto how decisions are made through individuals and firms and the effects of those decisions. For exa