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1) (15 points) Consider a two agent and two good exchange economy where agent 1 has preferences represented by u¹ (x11,
Posted: Fri Jul 01, 2022 7:52 am
by answerhappygod
- 1 15 Points Consider A Two Agent And Two Good Exchange Economy Where Agent 1 Has Preferences Represented By U X11 1 (25.65 KiB) Viewed 28 times
1) (15 points) Consider a two agent and two good exchange economy where agent 1 has preferences represented by u¹ (x11, X21) = x11x21. Agent 2 has preferences represented by utility function u²(x12, X22) = x12x22. Both agents have endowment (2,2). a) (5 points) Find the set of Pareto-optimal allocations. b) (10 points) Either characterize the set of Walrasian Equilibrium allocations or prove that none exists.