22) Consider a society consisting of just a farmer and a tailor. The farmer has 10 units of food but no clothing. The tailor has 20 units of clothing but no food. Suppose each has the utility function U = F * C. Derive the contract curve.

Consider a market with two households (A and B) and two goods (X and Y). Each household holds 12 units of each good. Household A has a utility UA = 5 In LA + In yA when it consumes bundle (*A, YA). Household B hasa utility UB = In aB+5 Inyg when it consumes bundle (гв, ув). The market reaches an equilibrium when the price of each good is $1. Which, of the following sentences, correctly explains what happens in the market? Household A purchases 8 units of good X from household B. Household B purchases 8 units of good Y from household A. Household A purchases 7 units of good Y from household B. Household B purchases 7 units of good X from household A. Household A purchases 9 units of good X from household B. Household B purchases 9 units of good Y from household A. O Household A purchases 7 units of good X from household B. Household B purchases 7 units of good Y from household A. Household A purchases 9 units of good Y from household B. Household B purchases 9 units of good X from…

Consider the pure exchange economy with 2 goods, good 1 and good 2, and two consumers, consumer A and consumer B. The consumers have the following utility functions: UA(X1A,X2A)=X1A+3x2A; UB(X1B,X2B)=x1B +X2B. Consumer A is initially endowed with 4 units of good A and no unit of good 2, that is, consumer A's initial endowment is (W1A,W2A)=(4,0). Consumer B is initially endowed with 3 units of good 2 and no unit of good 1, that is, (WIB,W2B)=(0,3). In order to implement the allocation (x1A,X2A)=(0,1), (x1B,X2B)=(4,2) as a Walrasian equilibrium, what transfer of wealth should we make between the consumers if good 1 is the numeraire, that is, if p1 =1? O a. An amount 7 of wealth should be transferred from consumer A to consumer B. O b. None of the other answers. An amount 3 of wealth should be transferred from consumer A to consumer B. O c. d. An amount 3 of wealth should be transferred from consumer B to consumer A. An amount 7 of wealth should be transferred from consumer B to consumer…

If you borrow $1000 from the bank at 5% simple interest per month due back in 2 years, what is the size of your monthly payments? (a) $25 (b) $50 (c) $500 (d) $1200

Consider the pure exchange economy with 2 goods, good 1 and good 2, and two consumers, consumer A and consumer B. The consumers have the following utility functions: UA(X1A,X2A)=X1A+3X2A; UB(X1B,X2B)=X1B +X2B. Consumer A is initially endowed with 4 units of good A and no unit of good 2, that is, consumer A's initial endowment is (w1A,W2A)=(4,0). Consumer B is initially endowed with 3 units of good 2 and no unit of good 1, that is, (w1B,W2B)=(0,3). In order to implement the allocation (x1A,X2A)=(0,1), (x1B,X2B)=(4,2) as a Walrasian equilibrium, what transfer of wealth should we make between the consumers if good 1 is the numeraire, that is, if p1 =1? An amount 7 of wealth should be transferred from consumer A to consumer B. O a. O b. None of the other answers. O c. An amount 3 of wealth should be transferred from consumer A to consumer B. O d. An amount 3 of wealth should be transferred from consumer B to consumer A. e. An amount 7 of wealth should be transferred from consumer B to…

Knowing that Caesar's preferences over apples (X) and oranges (Y) can be represented by the utility function U = 2X0.5y0.5, select the correct option about the bundles on the graph: ORANGES A D ● B E APPLES Caesar's ranking is, definitely, E>D> C>A-B. Caesar's ranking is, possibly, E> A-B>D>C. O We do not have enough information to know how Caesar ranks these bundles. O A and C might be on the same indifference curve.