Consider an economy with two individuals A and B, with utility functions UA = min[x^A, 2y^A] for A and UB= min[2x^B, y^B] for B and initial endowments given by WA= (1,0) and WB=(0,1). Check if goods are gross substitute and using this information comment whether the Walrasian equilibrium will be unique in this context.

/in /by

Consider an economy with two individuals A and B, with utility functions UA = min[x^A, 2y^A] for A and UB= min[2x^B, y^B] for B and initial endowments given by WA= (1,0) and WB=(0,1). Check if goods are gross substitute and using this information comment whether the Walrasian equilibrium will be unique in this context.

You might also like
Assume Thailand is a petroleum exporter on the global market. DRAW THE PETROLEUM MARKET in Thailand before and after international trade USING A DEMAND AND SUPPLY GRAPH (DRAW A GRAPH), assuming the world price for petroleum is above the Thailand petroleum market before open for international trade. IDENTIFY AND SHOW (DRAW A GRAPH) THE CHANGE in consumer surplus, producer surplus, and total surplus seeing as Thailand is now open for international trade. Additionally, GIVE SOME EXPLANATIONS for what happened.
COVID-19 pandemic. Give a diagnosis of the health of the South African economy following the changes in it’s macroeco- nomic indicators in the past 5 years. Your analysis should: (20 marks) ˆ Include all macro-economic indicators that explain the health of the macro-economy.
Explain the THREE instruments of monetary policy. With the use of appropriate economic models, explain and illustrate how the Central Bank can achieve an increase in real GDP with the use of three of the monetary policy instruments you discussed.
Ms. Chaltu is planning an around-the-world trip on which she plans to spend $10,000. The utility from the trip is a function of how much she actually spends on it (α), given by U (α) = ln α a. If there is a 25 percent probability that Ms. Chaltu will lose $1,000 of her cash on the trip, what is the trip’s expected utility? b. Suppose that Ms. Chaltu can buy insurance against losing the $1,000 (say, by purchasing traveler’s checks) at an “actuarially fair” premium of $250. Show that her expected utility is higher if she purchases this insurance than if she faces the chance of losing the $1,000 without insurance. c. What is the maximum amount that Ms. Chaltu would be willing to pay to insure her $1,000?
Determine the equilibrium price and quantity of the above market when j=100. Qd = Qs given the following equations: 400 - 2P + 4j = - 100 + 3P and 400+400+100 = 3P+2P calculate price and quantity.
Rich economies which produce more goods and services each year: A. do not have an economic problem. B. still have an economic problem. C. do have an economic problem but are solving it. D. give more money to the government to solve its problems. E. Balance sheet
With clear diagrams describe various types of preferences and demonstrate what indifference curves that represent them look like
The budget allocation rule states that (A) the marginal utility of x equals the marginal utility of y at maximum utility. (B) the marginal utility of x divided by its price be equal to marginal utility of all other goods divided by their prices. (C). the marginal utility of x equals the marginal rate of substitution of x for y. (D) the ratio of prices of x to y be greater than the ratio of marginal utility of x to the marginal utility of y.