Consider an exchange economy with two types of agents, A and B, and two goods, x and y. Preferences are given byUA (XA, YA) = = A + 6 ln(y₁) and UB(TB, YB) = ln(TBYB). Suppose the government wants to reach the goal ofXB = 5 with the competitive equilibrium by setting a redistribution r such that w₁ = (10,r) and wB = (0,20 - r).1. Find r reaches the government's goal. Round your answer to 2 decimal points.Let Py=Answer:

UA = xA + 6 ln (yA ) UB = ln (xB yB ) Goal of xB =5 Endowments: wA = (10 , r) wB = (0 , 20-r) py…

Consider an exchange economy with two types of agents, A and B, and two goods, and y. Preferences are given by UA (XA, YA) = A +6ln(yA) and uB (TB, YB) = ln(TBYB). Suppose the government wants to reach the goal of B = 5 with the competitive equilibrium by setting a redistribution r such that wA Let Py = 1. Find r reaches the government's goal. Round your answer to 2 decimal points. (10,r) and WB = (0,20 - r). Answer:

Consider an exchange economy with two types of agents, A and B, and two goods, and y. Preferences are given by UA (XA, YA) = A +6ln(yA) and uB (TB, YB) = ln(TBYB). Suppose the government wants to reach the goal of B = 5 with the competitive equilibrium by setting a redistribution r such that wA Let Py = 1. Find r reaches the government's goal. Round your answer to 2 decimal points. (10,r) and WB = (0,20 - r). Answer:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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