Re: DSE-2009

Posted by nidhi on Jun 04, 2010; 3:58pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2009-tp5138086p5140056.html

Hey sonal thanks....
could u tell me  how to solve the following  question
 
Q2. Consider an exchange economy with persons 1 and 2 and goods x and y. Person 1’s utility
   function is u1(x, y) = y +log(x) and u2(x, y) = y + log(x). The total endowment of the economy
   is (2, 2). Which of the following is true about this economy?
a) Allocations in the set {((x1, y1), (x2, y2)) | x1 = x2 = 1, y1 + y2 = 2, 0 ≤ y1 ≤ 2 } are efficient.
b) Allocations in the set {((x1, y1), (x2, y2)) | 0 ≤ x1 < 1, x1 + x2 = 2, y1 = 0, y2 = 2 } are efficient.
c) Allocations in the set {((x1, y1), (x2, y2)) | 0 ≤ x2 < 1, x1 + x2 = 2, y1 = 2, y2 = 0 } are efficient.
d) All of the above