Grapes and bananas are perfect complements for Jane and Betty. Jane eats one grape per three bananas.; Betty eats three grapes per one banana. Once they go to sports for hours, Jane had 20 grapes and 10 bananas and Betty had 10 grapes and 20 bananas. (assume that grapes and bananas can be divided into half) 1. Dar the Edgeworth box and show all Pareto optimal allocations of grapes and bananas between Jane and Betty.

Grapes and bananas are perfect complements for Jane and Betty. Jane eats one grape per three bananas.; Betty eats three grapes per one banana. Once they go to sports for hours, Jane had 20 grapes and 10 bananas and Betty had 10 grapes and 20 bananas. (assume that grapes and bananas can be divided into half) 1. Dar the Edgeworth box and show all Pareto optimal allocations of grapes and bananas between Jane and Betty.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 8PA

See similar textbooks

Related questions

Q: Bert has an initial endowment consisting of 10 units of food and 1o units of clothing. ernie’s…

A: Bert Initial Endowment = 10 units of Food and 10 Units of clothing Ernie's Initial Endowment = 10…

Q: A consumer has a constant MRS of x for y equal to 1/4 for any quantity of x or y. They currently…

A: The Marginal Rate of Substitution (MRS) is a concept in economics that measures the rate at which a…

Q: 1. Why might someone who is trying to decide whether to see a movie be more likely to focus on the…

A: Opportunity costs refers to the cost which arises when an opportunity is foregone by choosing some…

Q: Marshmallow 1 and Marshmallow 2 want to watch animated shows. There is only one device between them…

A: In order to generate stable equilibria, microeconomic equilibrium arrangements explore numerous…

Q: The table below shows the total benefit, in dollars, that Andrew derives from consuming two goods,…

A: The total benefit is the benefit received by the consumption of the good. Marginal benefit is the…

Q: 3. Jane is currently consuming 4 glasses of milk and 10 cookies, while Betty is consuming 9 glasses…

A: The economic condition known as Pareto efficiency, or Pareto optimality, is one in which resources…

Q: To maintain the level of happiness they experienced before the price decrease-that is, to consume at…

A: The income effect is the change in purchasing power that occurs as a result of a change in the price…

Q: 5. Each week, Bill, Mary, and Jane select the quantity of two goods, x, and x2, that they will…

A: Total utility is the total measure of fulfillment or satisfaction that a purchaser gets through the…

Question

1. Dar the Edgeworth box and show all Pareto optimal allocations of grapes and bananas between Jane and Betty.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Grapes and bananas are perfect complements for Jane and Betty. Jane eats one grape per three bananas.; Betty eats three grapes per one banana. Once they go to sports for hours, Jane had 20 grapes and 10 bananas and Betty had 10 grapes and 20 bananas. (assume that grapes and bananas can be divided into half) 1. Draw the Edgeworth box for Jane and Betty. Place Jane at the origin and Betty on the upside-down. Draw their endowment point. (Grape on the horizontal axis and banana on the vertical)
Grapes and bananas are perfect complements for Jane and Betty. Jane eats one grape per three bananas.; Betty eats three grapes per one banana. Once they go to sports for hours, Jane had 20 grapes and 10 bananas and Betty had 10 grapes and 20 bananas. (assume that grapes and bananas can be divided into half) 1.Show all Pareto optimal allocations of grapes and bananas between Jane and Betty in the Edgeworth Box. Draw a bunch of indifference curves and look for tangencies.
10. Consumer A and B have each been given an allocation of 2 goods x and y (assume each has positive amounts of both goods). At this allocation, consumer A has an MRS of 2, while consumer B has an MRS of 1/2. Could this allocation be Pareto efficient? Explain why or why not.
3. Jane is currently consuming 4 glasses of milk and 10 cookies, while Betty is consuming 9 glasses of milk and 3 cookies. Jane views milk and cookies as perfect substitutes (her MRS is 1), while Betty prefers cookies to milk and is willing to give up 3 glasses of milk to get 1 cookie. Is the current allocation of milk and cookies Pareto efficient? Explain with use of a diagram.
Grapes and bananas are perfect complements for Jane and Betty. Jane eats one grape per three bananas.; Betty eats three grapes per one banana. Once they go to sports for hours, Jane had 20 grapes and 10 bananas and Betty had 10 grapes and 20 bananas. (assume that grapes and bananas can be divided into half) 1. Draw the Edgeworth box for Jane and Betty. Place Jane at the origin and Betty on the upside-down. Draw their endowment point and 45 degree line . (Grape on the horizontal axis and banana on the vertical)
1
| Two people trade two goods that they cannot produce. Suppose that one Mary's indifference curves are bowed away from the origin-the usual type of curves-but Joe's are concave to the origin. In an Edgeworth box, show that a point of tangency between the two consumers' indifference curves is not a Pareto efficient bundle. (Identify another allocation that Pareto dominates.) Put Mary on the southwest corner and Joe on northeast corner.
1. General Equilibrium: a. Suppose that Eliza and Alexander are currently at point A. How many servings of tea and scones does each person have? (Note: Alexander's indifference curve is pink while Eliza's indifference curve is black). b. Suppose that Eliza leaves the room and that Alexander takes 4 cups of tea from her and leaves her 2 of his scones. Illustrate this reallocation in the Edgeworth Box diagram (label this point B). Is this a Pareto improvement? c. Show that a reallocation where Alexander takes 4 cups of tea and leaves Eliza only 1 scone is not a Pareto improvement. Label this new allocation point C. Alexander's Scones Utility Alexander A Utility Eliza Eliza's scones Eliza's Tea Alexander- s Tea
Bert has an initial endowment consisting of 10 units of food and 1o units of clothing. ernie’s initial endowment consists of 10 units of food and 20 units of clothing. Bert regards food and clothing as perfect 1-for-1 substitutes. Ernie regards them as perfect complements, always wanting to consume 3 units of clothing for every 2 units of food. 1. Describe the set of allocations that are Pareto preferred?2. What price ratio will be required to sustain an allocation on the contract curve?
A10
If an allocation is Pareto optimal and if indifference curves between the two goods have no kinks, then (Select all that applies) Group of answer choices a. two consumers who consume both goods must have the same MRS between them, but consumers may consume the goods in different ratios. b. two consumers with the same income who consume both goods must have the same MRS, but if their incomes differ, their MRSs may differ. c. any two consumers who consume both goods must consume them in the same ratio. d. for any two consumers who consume both goods, neither will prefer the other consumer’s bundle to his own. e. all consumers receive the bundle that they prefer to any other bundle the economy could produce for them.
8. Andrew and Vladimir are neighbours who enjoy consuming caviar. The demand curve for caviar for Andrew and Vlad are given as follows: Andrew: Vladimir: p = 40-q. p = 80 - 4q. If Andrew and Vladimir are the only two consumers of caviar the market demand curve is kink at the price equals to: a. p = 40 b. p = 20 c. p = 10 d. p = 25