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 2:33:16 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
What are the trends of labour and capital as macrfoeconomics variables?

Which is better meausute of welfare?

What are long run and short run? Long run: It is the time period wherein all inputs cannot be fixed. Short run: It is the time period within which at least one in

Q. Explain about Quantity theory of money? One of the main elements of the classical model is quantity theory of money. Quantity theory of money connects three important variab

Axiom of completeness: Consumer's choice is complete. Implication: Since consumer is rational, she must have a unique preference relation. That means the consumer choice is ei

Shortage, Surplus and Price Mechanism: A shortage is the situation in which the demand exceeds supply, which means producers are unable to meet the market demand for the produc

Suppose there are two investors. One has a project to build a factory; the other has a project to visit casino and gamble on roulette. Which investor has a greater incentive to iss

The different between williams managerial discretion model and baumol''s sales maximization model

Give examples of a monopoly and an example of perfect competition. Explain how each of your examples matches the textbook's definition of that market structure. Monopoly-a firm tha

Assuming that the expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure for maturity. Next, plot the resulting yield c