Answer to Question #54751 in Microeconomics for Sunil
with two consumption goods bi-cycles (b) and
wheat (w). Both consumers have the same utility
function (b, w) = bw. Bi-cycles and wheat are
produced by two firms which use only labour
according to the production functions.
CD b = \r/T, and w = 0.5 \Ft,
Both firms are owned by consumer 1, and
CD consumer 2 owns 200 units of labour. Cr.)
(a) Find the production possibility frontier for
(b) Find the competitive equilibrium.
(c) Find competitive equilibrium if every
consumer owns 100 units of labour and
owns one firm.
(b) In this case, the competitive equilibrium can't be found, as there is not enough data.
(c) If every consumer owns 100 units of labour and owns one firm, the competitive equilibrium will change.
(d) We can't find the Pareto efficient allocations for this economy, because there is not enough data.
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