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Author Question: Only individuals A and B live on a desert island where no production is possible. A is endowed with ... (Read 540 times)

Engineer

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on: Jun 18, 2019
Only individuals A and B live on a desert island where no production is possible. A is endowed with 12 units of good X and 18 units of good Y. B is endowed with 6 units of good X and 42 units of good Y. In the Edgeworth box, good X is measured on the horizontal axis. Individual A's utility function is so her MUX = 3Y and her MUY = 3X. Individual B's utility function is UB = 10 so his and his MUY = 5. Which of the following allocations are on the contract curve?
◦ (XA = 9, YA = 30), (XB = 9, YB = 30)
◦ (XA = 10, YA = 28), (XB = 8, YB = 32)
◦ (XA = 12, YA = 24), (XB = 6, YB = 36)
◦ None of the above.
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Chou

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Reply #1 on: Jun 18, 2019
(XA = 9, YA = 30), (XB = 9, YB = 30)


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Engineer

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Reply #2 on: Jun 18, 2019
Excellent


Chou

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Reply #3 on: Jun 18, 2019
Great! Please up vote :D


cookcarl

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Reply #4 on: Jun 18, 2019
Only individuals A and B live on a desert island where no production is possible. A is endowed with 15 units of good X and 17 units of good Y. B is endowed with 13 units of good X and 23 units of good Y. In the Edgeworth box, good X is measured on the horizontal axis. Individual A's utility function is and her MUY = 3X. Individual B's utility function is UB = 10 so his and his MUY = 5. Which of the following allocations are on the contract curve?
◦ (XA = 15, YA = 17), (XB = 13, YB = 23)
◦ (XA = 14, YA = 20), (XB = 14, YB = 20)
◦ (XA = 18, YA = 22), (XB = 10, YB = 18)
◦ None of the above.


ladyjames123

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Reply #5 on: Jun 18, 2019
(XA = 14, YA = 20), (XB = 14, YB = 20)


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