SlideShare a Scribd company logo
1 of 1
Download to read offline
2. Consider an economy with L=2 goods and M=2 consumers. Consumer i=1 and i=2 have utility
functions u1(x11,x12)=21x112+x12u2(x21,x22)=x2121x222 where xi=(xi1,xi2) is the consumption
of good1 and 2 of agent i=1,2. The total endowment of good 1 is 11+21=1 and the total
endowment of good 2 is 21+22=1, where i is the endowment of good of consumer i. (a) Find the
contract curve for this economy -in other words, find the points x12 that are Pareto optimal as a
function of x11, conditional that x12 and x11 are both feasible. (b) Can the allocation x^1=(1/4,1/3)
be implemented by a social planner as an equilibrium? Explain.

More Related Content

More from madhan608556

Describa un plan de cmo Thomas Green podra mejorar sus hab.pdf
Describa un plan de cmo Thomas Green podra mejorar sus hab.pdfDescriba un plan de cmo Thomas Green podra mejorar sus hab.pdf
Describa un plan de cmo Thomas Green podra mejorar sus hab.pdf
madhan608556
 
1Which of the following is NOT recognized as a product defe.pdf
1Which of the following is NOT recognized as a product defe.pdf1Which of the following is NOT recognized as a product defe.pdf
1Which of the following is NOT recognized as a product defe.pdf
madhan608556
 
There are cougars that have two coat color phenotypes blue .pdf
There are cougars that have two coat color phenotypes blue .pdfThere are cougars that have two coat color phenotypes blue .pdf
There are cougars that have two coat color phenotypes blue .pdf
madhan608556
 
Mr Manns Clinical Scenario Mr Mann aged 50 years has be.pdf
Mr Manns Clinical Scenario Mr Mann aged 50 years has be.pdfMr Manns Clinical Scenario Mr Mann aged 50 years has be.pdf
Mr Manns Clinical Scenario Mr Mann aged 50 years has be.pdf
madhan608556
 

More from madhan608556 (20)

Ejercicio fundamental 416 Conciliacin Bancaria Firebird C.pdf
Ejercicio fundamental 416 Conciliacin Bancaria  Firebird C.pdfEjercicio fundamental 416 Conciliacin Bancaria  Firebird C.pdf
Ejercicio fundamental 416 Conciliacin Bancaria Firebird C.pdf
 
Create 3 classes Person Super Class CovidForm subclass and.pdf
Create 3 classes Person Super Class CovidForm subclass and.pdfCreate 3 classes Person Super Class CovidForm subclass and.pdf
Create 3 classes Person Super Class CovidForm subclass and.pdf
 
Describa un plan de cmo Thomas Green podra mejorar sus hab.pdf
Describa un plan de cmo Thomas Green podra mejorar sus hab.pdfDescriba un plan de cmo Thomas Green podra mejorar sus hab.pdf
Describa un plan de cmo Thomas Green podra mejorar sus hab.pdf
 
Common stock valuation Abercrombie amp Fitchs common st.pdf
Common stock valuation Abercrombie amp Fitchs common st.pdfCommon stock valuation Abercrombie amp Fitchs common st.pdf
Common stock valuation Abercrombie amp Fitchs common st.pdf
 
6 Consider the following graph where S is the start state a.pdf
6 Consider the following graph where S is the start state a.pdf6 Consider the following graph where S is the start state a.pdf
6 Consider the following graph where S is the start state a.pdf
 
1Which of the following is NOT recognized as a product defe.pdf
1Which of the following is NOT recognized as a product defe.pdf1Which of the following is NOT recognized as a product defe.pdf
1Which of the following is NOT recognized as a product defe.pdf
 
Can you please help me complete the puzzle Across Down 4 s .pdf
Can you please help me complete the puzzle Across Down 4 s .pdfCan you please help me complete the puzzle Across Down 4 s .pdf
Can you please help me complete the puzzle Across Down 4 s .pdf
 
A population of values has a normal distribution with 2432.pdf
A population of values has a normal distribution with 2432.pdfA population of values has a normal distribution with 2432.pdf
A population of values has a normal distribution with 2432.pdf
 
What strategy can you design to get this new drug into the c.pdf
What strategy can you design to get this new drug into the c.pdfWhat strategy can you design to get this new drug into the c.pdf
What strategy can you design to get this new drug into the c.pdf
 
Indique si cada afirmacin es verdadera o falsa seleccionand.pdf
Indique si cada afirmacin es verdadera o falsa seleccionand.pdfIndique si cada afirmacin es verdadera o falsa seleccionand.pdf
Indique si cada afirmacin es verdadera o falsa seleccionand.pdf
 
There are cougars that have two coat color phenotypes blue .pdf
There are cougars that have two coat color phenotypes blue .pdfThere are cougars that have two coat color phenotypes blue .pdf
There are cougars that have two coat color phenotypes blue .pdf
 
Suppose that you want an operation for the ADT list that ret.pdf
Suppose that you want an operation for the ADT list that ret.pdfSuppose that you want an operation for the ADT list that ret.pdf
Suppose that you want an operation for the ADT list that ret.pdf
 
11 Let X be a hypergeometric RV with PMF PMXxNn1Mx.pdf
11 Let X be a hypergeometric RV with PMF PMXxNn1Mx.pdf11 Let X be a hypergeometric RV with PMF PMXxNn1Mx.pdf
11 Let X be a hypergeometric RV with PMF PMXxNn1Mx.pdf
 
t Fird the sarnghe manan The sample meania 1595 ihound to.pdf
t Fird the sarnghe manan The sample meania 1595 ihound to.pdft Fird the sarnghe manan The sample meania 1595 ihound to.pdf
t Fird the sarnghe manan The sample meania 1595 ihound to.pdf
 
1 UTrade Inc compra productos en China y los vende a com.pdf
1 UTrade Inc compra productos en China y los vende a com.pdf1 UTrade Inc compra productos en China y los vende a com.pdf
1 UTrade Inc compra productos en China y los vende a com.pdf
 
Random variable X has probability density function fXx1x.pdf
Random variable X has probability density function fXx1x.pdfRandom variable X has probability density function fXx1x.pdf
Random variable X has probability density function fXx1x.pdf
 
Part 210 points Calculate Retained Earnings The stockhol.pdf
Part 210 points Calculate Retained Earnings The stockhol.pdfPart 210 points Calculate Retained Earnings The stockhol.pdf
Part 210 points Calculate Retained Earnings The stockhol.pdf
 
Mr Manns Clinical Scenario Mr Mann aged 50 years has be.pdf
Mr Manns Clinical Scenario Mr Mann aged 50 years has be.pdfMr Manns Clinical Scenario Mr Mann aged 50 years has be.pdf
Mr Manns Clinical Scenario Mr Mann aged 50 years has be.pdf
 
Let there be two goods L2 Consider a finite number of Leo.pdf
Let there be two goods L2 Consider a finite number of Leo.pdfLet there be two goods L2 Consider a finite number of Leo.pdf
Let there be two goods L2 Consider a finite number of Leo.pdf
 
How to answer these questions below in general 1 Pleas.pdf
How to answer these questions below in general  1    Pleas.pdfHow to answer these questions below in general  1    Pleas.pdf
How to answer these questions below in general 1 Pleas.pdf
 

Recently uploaded

IATP How-to Foreign Travel May 2024.pdff
IATP How-to Foreign Travel May 2024.pdffIATP How-to Foreign Travel May 2024.pdff
IATP How-to Foreign Travel May 2024.pdff
17thcssbs2
 
Neurulation and the formation of the neural tube
Neurulation and the formation of the neural tubeNeurulation and the formation of the neural tube
Neurulation and the formation of the neural tube
SaadHumayun7
 

Recently uploaded (20)

Championnat de France de Tennis de table/
Championnat de France de Tennis de table/Championnat de France de Tennis de table/
Championnat de France de Tennis de table/
 
TỔNG HỢP HƠN 100 ĐỀ THI THỬ TỐT NGHIỆP THPT VẬT LÝ 2024 - TỪ CÁC TRƯỜNG, TRƯ...
TỔNG HỢP HƠN 100 ĐỀ THI THỬ TỐT NGHIỆP THPT VẬT LÝ 2024 - TỪ CÁC TRƯỜNG, TRƯ...TỔNG HỢP HƠN 100 ĐỀ THI THỬ TỐT NGHIỆP THPT VẬT LÝ 2024 - TỪ CÁC TRƯỜNG, TRƯ...
TỔNG HỢP HƠN 100 ĐỀ THI THỬ TỐT NGHIỆP THPT VẬT LÝ 2024 - TỪ CÁC TRƯỜNG, TRƯ...
 
IATP How-to Foreign Travel May 2024.pdff
IATP How-to Foreign Travel May 2024.pdffIATP How-to Foreign Travel May 2024.pdff
IATP How-to Foreign Travel May 2024.pdff
 
Word Stress rules esl .pptx
Word Stress rules esl               .pptxWord Stress rules esl               .pptx
Word Stress rules esl .pptx
 
INU_CAPSTONEDESIGN_비밀번호486_업로드용 발표자료.pdf
INU_CAPSTONEDESIGN_비밀번호486_업로드용 발표자료.pdfINU_CAPSTONEDESIGN_비밀번호486_업로드용 발표자료.pdf
INU_CAPSTONEDESIGN_비밀번호486_업로드용 발표자료.pdf
 
Dementia (Alzheimer & vasular dementia).
Dementia (Alzheimer & vasular dementia).Dementia (Alzheimer & vasular dementia).
Dementia (Alzheimer & vasular dementia).
 
Post Exam Fun(da) Intra UEM General Quiz 2024 - Prelims q&a.pdf
Post Exam Fun(da) Intra UEM General Quiz 2024 - Prelims q&a.pdfPost Exam Fun(da) Intra UEM General Quiz 2024 - Prelims q&a.pdf
Post Exam Fun(da) Intra UEM General Quiz 2024 - Prelims q&a.pdf
 
Basic Civil Engg Notes_Chapter-6_Environment Pollution & Engineering
Basic Civil Engg Notes_Chapter-6_Environment Pollution & EngineeringBasic Civil Engg Notes_Chapter-6_Environment Pollution & Engineering
Basic Civil Engg Notes_Chapter-6_Environment Pollution & Engineering
 
Matatag-Curriculum and the 21st Century Skills Presentation.pptx
Matatag-Curriculum and the 21st Century Skills Presentation.pptxMatatag-Curriculum and the 21st Century Skills Presentation.pptx
Matatag-Curriculum and the 21st Century Skills Presentation.pptx
 
Operations Management - Book1.p - Dr. Abdulfatah A. Salem
Operations Management - Book1.p  - Dr. Abdulfatah A. SalemOperations Management - Book1.p  - Dr. Abdulfatah A. Salem
Operations Management - Book1.p - Dr. Abdulfatah A. Salem
 
50 ĐỀ LUYỆN THI IOE LỚP 9 - NĂM HỌC 2022-2023 (CÓ LINK HÌNH, FILE AUDIO VÀ ĐÁ...
50 ĐỀ LUYỆN THI IOE LỚP 9 - NĂM HỌC 2022-2023 (CÓ LINK HÌNH, FILE AUDIO VÀ ĐÁ...50 ĐỀ LUYỆN THI IOE LỚP 9 - NĂM HỌC 2022-2023 (CÓ LINK HÌNH, FILE AUDIO VÀ ĐÁ...
50 ĐỀ LUYỆN THI IOE LỚP 9 - NĂM HỌC 2022-2023 (CÓ LINK HÌNH, FILE AUDIO VÀ ĐÁ...
 
slides CapTechTalks Webinar May 2024 Alexander Perry.pptx
slides CapTechTalks Webinar May 2024 Alexander Perry.pptxslides CapTechTalks Webinar May 2024 Alexander Perry.pptx
slides CapTechTalks Webinar May 2024 Alexander Perry.pptx
 
Post Exam Fun(da) Intra UEM General Quiz - Finals.pdf
Post Exam Fun(da) Intra UEM General Quiz - Finals.pdfPost Exam Fun(da) Intra UEM General Quiz - Finals.pdf
Post Exam Fun(da) Intra UEM General Quiz - Finals.pdf
 
Danh sách HSG Bộ môn cấp trường - Cấp THPT.pdf
Danh sách HSG Bộ môn cấp trường - Cấp THPT.pdfDanh sách HSG Bộ môn cấp trường - Cấp THPT.pdf
Danh sách HSG Bộ môn cấp trường - Cấp THPT.pdf
 
....................Muslim-Law notes.pdf
....................Muslim-Law notes.pdf....................Muslim-Law notes.pdf
....................Muslim-Law notes.pdf
 
UNIT – IV_PCI Complaints: Complaints and evaluation of complaints, Handling o...
UNIT – IV_PCI Complaints: Complaints and evaluation of complaints, Handling o...UNIT – IV_PCI Complaints: Complaints and evaluation of complaints, Handling o...
UNIT – IV_PCI Complaints: Complaints and evaluation of complaints, Handling o...
 
The Last Leaf, a short story by O. Henry
The Last Leaf, a short story by O. HenryThe Last Leaf, a short story by O. Henry
The Last Leaf, a short story by O. Henry
 
Neurulation and the formation of the neural tube
Neurulation and the formation of the neural tubeNeurulation and the formation of the neural tube
Neurulation and the formation of the neural tube
 
“O BEIJO” EM ARTE .
“O BEIJO” EM ARTE                       .“O BEIJO” EM ARTE                       .
“O BEIJO” EM ARTE .
 
Removal Strategy _ FEFO _ Working with Perishable Products in Odoo 17
Removal Strategy _ FEFO _ Working with Perishable Products in Odoo 17Removal Strategy _ FEFO _ Working with Perishable Products in Odoo 17
Removal Strategy _ FEFO _ Working with Perishable Products in Odoo 17
 

2 Consider an economy with L2 goods and M2 consumers Con.pdf

  • 1. 2. Consider an economy with L=2 goods and M=2 consumers. Consumer i=1 and i=2 have utility functions u1(x11,x12)=21x112+x12u2(x21,x22)=x2121x222 where xi=(xi1,xi2) is the consumption of good1 and 2 of agent i=1,2. The total endowment of good 1 is 11+21=1 and the total endowment of good 2 is 21+22=1, where i is the endowment of good of consumer i. (a) Find the contract curve for this economy -in other words, find the points x12 that are Pareto optimal as a function of x11, conditional that x12 and x11 are both feasible. (b) Can the allocation x^1=(1/4,1/3) be implemented by a social planner as an equilibrium? Explain.