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Please provide thorough explanations 1. [8] Consider a two-consumer economy in which wA = (3,3), L03 = (0,1), uA(m'14,m2A) (Barfly; and v.3 (1:19 , 3:23
Please provide thorough explanations
1. [8] Consider a two-consumer economy in which wA = (3,3), L03 = (0,1), uA(m'14,m2A) (Barfly; and v.3 (1:19 , 3:23 ) = 319(m23)5, where a, {3 > 0 are parameters. (a) [2] Illustrate this economy in an Edgeworth box. (b) [2] Derive a competitive equilibrium for this economy. (c) [2] How do the prices and allocations in the equilibrium you found in (b) depend on a? Interpret your answer. (d) [2] How do the prices and allocations in the equilibrium you found in (b) depend on ? Interpret yourStep by Step Solution
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