Question
Illustrate the following endowment economies with 2 people and 2 goods in an Edgeworth box. To receive full marks you must label your graphs properly.
Illustrate the following endowment economies with 2 people and 2 goods in an Edgeworth box. To receive full marks you must label your graphs properly. a. Eleanor has a utility function of uE (c1, c2) = c1 + 2c2. Chidi has a utility function of uC (c1, c2) = 10c2 + 5c2. They have identical endowments of eE = eC = (2, 2). b. Jason has a utility function of uJ (c1, c2) = ln(c1) + 1 2 ln(c2). Tahani has a utility function of uT (c1, c2) = min {c1, c2} . The endowments are eJ = (1, 2) and eT = (2, 1). c. Michael has a utility function of uM (c1, c2) = c1 + c2. Shawn has a utility function of uS (c1, c2) = 5 (c1 + c2). The endowments are eM = (0, 1) and eS = (2, 1). d. Do Michael and Shawn have the same utility representation? Explain your answer in one sentence. e. Will Michael and Shawn trade? Explain your answer in one sentence.
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