Question: general equilibrium microecon. 2.) Individual A and B have the following preferences: HA = ln(:c}1) +1n(a:i) and as = ln(a:}13) +1n(a:23). Their endowments are given
general equilibrium microecon.
2.) Individual A and B have the following preferences: HA = ln(:c}1) +1n(a:i) and as = ln(a:}13) +1n(a:23). Their endowments are given by MA = (2, 6) and on; = (2, 4 . Solve for (and graph) competitive equilibrium and the contract curve. 3.) Now resolve problem 2 but replace individual A's preferences with EA = mhwi + $23. That is, individual B has a positive externality on individual A
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock