In an exchange economy A's utility is given by UA = x + y and B's ...

[2125004343]

In an exchange economy A's utility is given by UA = x + y and B's by UB = minx, 2y. The initial endowment for A is x = 10, y = 8 and for B, x = 8, y = 4 . To reach the contact curve, these individuals must:
 a. trade 1x for 1y.
  b. trade 2x for 1y.
  c. trade 1x for 2y.
  d. do nothing, since they are already on the contract curve.

Question 2

Which of the following is (are) a basic principle(s) when estimating a project's cash flows?
 a. cash flows should be measured on a pre-tax basis
  b. cash flows should ignore depreciation since it is a non-cash charge
  c. only direct effects of a project should be included in the cash flow calculations
  d. cash flows should be measured on an incremental basis
  e. all of the above

[Gabe]

Answer to Question 1

d

Answer to Question 2

d

[2125004343]

Excellent

[robbielu01]

TYSM