MR, Macroeconomics

Question 1: Consider a two-period, two-person pure exchange economy. Utility functions and
endowments are given as follows.
u1(x0; x1) = (x0x1)2 and e1 = (18; 4)
u2(x0; x1) = ln x0 + 2 ln x1 and e2 = (3; 6)
1. Characterize the set of ecient allocations as completely as possible.
2. Describe an Arrow-Debreu environment for this economy, explaining when markets are
open, who trades what with whom, and so on. De ne an Arrow-Debreu competitive
equilibrium (AD equilibrium, for short).
3. Find the unique AD equilibrium of this economy.
Posted Date: 9/30/2012 2:33:11 PM | Location : United States







Related Discussions:- MR, Assignment Help, Ask Question on MR, Get Answer, Expert's Help, MR Discussions

Write discussion on MR
Your posts are moderated
Related Questions
The questions posed are broad and open ended so be careful to allow yourself enough research and planning time. If you are completely on top of the material delivered in class, the

Explain demand management of Keynesian economists The demand management of Keynesian economists of 50's and 60's is attacked by free-marketers for ignoring the importance of s

A change in government purchases of goods and services results in a change in real GDP equal to $200 million. Assume the absence of taxes, international trade, and changes in the a

Gross Domestic Savings  Income not devoted to current consumption is saved. In an economy during a particular year some units will consume less than their income while some wil

Suppose that a household in a two-period model has income of $30,000 in period 1 and $25,000 in period 2, and the interest rate is 75 percent. Assume that the price of the good is

Component of balance payment: BOP is a statement  that summarises all the economic transactions between residents (individuals, companies and other organisations) of the home

with reference to incidence of taxation, explain with the help of a diagrams, who bears the incidence of taxation when the demand for a commodity is (i)perfectly inelastic (ii) uni

Informal groups exist in almost every kind of organization. Answer the following questions and provide examples to support your position: • What types of informal groups do you

Discuss whether high indirect taxes are best way to discourage smoking

The study of the overall aspects and workings of a national economy is like as income, output, and the interrelationship between diverse economic sectors. It is the study of all as