# Questions tagged [pure-exchange-economy]

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### Increase in income in an economy would increase

Increase in income in an economy would increase the following except Consumption Savings Imports Exports
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1 vote
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### Finding the competitive equilibrium in an exchange economy with two perfect complements

I am currently in a Microeconomics class and have come across the problem described below. I have tried to solve the problem algebraically but only get to the intercept (x1a,x2a)=(8,4). I know that ...
1 vote
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### How do I find the set of pareto optimal allocations?

Suppose there are 2 individuals and 2 goods. $u_1(x_1,y_1)=x_1+2y_1$, and $u_2(x_2,y_2)=x_2+y_2$. There are 2 units of good $x$ and 1 unit of good $y$ in total. How do I find the set of Pareto optimal ...
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### Why doesn't this exchange economy have a walrasian equilibrium?

Consider an exchange economy with $n$ individuals and 2 goods $x,y$. All individuals have the same utility function $u(x,y)=x^2+y^2$ and the same endowment $w=(1,1)$. I tried to solve the problem with ...
1 vote
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### Trying to understand Walrasian equilibrium (Brown & Matzkin 1996)

I'm trying to understand page 6-7 of the Brown & Matzkin paper. Here is an example: Consider a 2-person, 2-good pure exchange economy $E=(u_i,w_i)_{i=1}^2$ where both utility functions are ...
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### Edgeworth Box for exchange economy

Could you please tell me, if the Edgeworth Box I have drawn for the exchange economy is correct? My professor's solution is really unclear. Thank you!
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### Why can’t we know the specific outcome of an exchange economy with initial resource endowment?

In a 2-person exchange economy we define the contract curve as the subset of all Pareto-efficient outcomes within the ‘lens’ bounded by both agents’ indifference curves through $\vec{R}$ which is the ...
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### Utility Possibility Frontier with two consumers and 3 commodities

I am trying to solve the following problem: Consider a pure exchange economy with three commodities and two households with individual endowments: $$e_1=(1,2,3), e_2=(3,2,1),$$ respectively, and ...
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1 vote
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### A question about the exchange economy

The question I am given is the following: Consider an economy that has only three goods, mineral water, orange juice, and wine available in ﬁxed amounts, and three agents, A, B and C. So in this ...
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### Pareto-optimal allocations in the Edgeworth box

If agent A has utility function $u(x_1, x_2)$ and agent B has utility function $v(x_1, x_2)$, what are the equation(s) that characterize the Pareto-efficient allocation of goods in the Edgeworth box? ...
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### Pure exchange economy: Set of multiple equilibria endowments

Initial endowments which can result in multiple equilibria in a pure exchange economy are explained here. Given a pure exchange economy, that is given the utility functions (which fulfil the usual ...
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### Pure exchange economy: Given an initial endowment are multiple equilibria possible?

Consider a pure exchange economy with two goods ($x_1,x_2$) and two consumers $A,B$. Both users have an initial endowment, $(\omega_1^A,\omega_2^A)$ and $(\omega_1^B,\omega_2^B)$ respectively. A price ...
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In an Edgeworth economy with two agents and two goods, Player A has endowment $\left(a,\,0\right)$ and utility $u_{A}\left(x_{1},\,x_{2}\right)=\min\left(\gamma x_{1},\,x_{2}\right)$ in which $\gamma&... 0 votes 2 answers 3k views ### Does the contract curve always have to connect the initial points on an edgeworth box? Why or why not? What if the contract curve goes out of bounds? In that case, do I assume it superimposes itself on the axes it is closest to? I hope this was clear. Not sure how to explain this other than visually...... • 163 8 votes 4 answers 527 views ### Fair and efficient allocation of "family goods" Consider an exchange economy with two goods, e.g. home furniture (x) and electrical equipment (y). The interesting thing about these goods is that, when a family owns a bundle, all members of the ... • 3,075 1 vote 1 answer 9k views ### How does an import quota affect the demand / supply of currency? An import quota in an open economy might not have the desired affect of increasing the GDP as it increases the demand of domestic currency in the open market raising exchange rate. How does it happen ... • 1,104 3 votes 1 answer 1k views ### Price ratio determined by endowments only? Am I right to say in an Exchange Economy with two consumers with identical preferences, the equilibrium price (WEA) of the two goods would be determined by availability of two goods, i.e, total ... • 263 0 votes 1 answer 2k views ### Competitive equilibrium in an exchange economy with lexicographic preferences [closed] I am really stuck with this problem and not able to approach it. Any help will be much appreciated. I tried to draw edgeworth box with initial endowment point. I do know that for competitive ... 3 votes 0 answers 154 views ### How to find walrasian asignations? [closed] In a economy Arrow Debreau of pure exchange with two agents and two goods. With utility function of Leontief for agent B, where$U_b(x_b,y_b)=\min(x_b,y_b)$; and for agent A a simple Cobb-Douglas$U_a(...
We have a pure exchange economy, two consumers $A,B$ and two goods $x,y$. The utility functions are as follows $$u_A=\min\{x_A,y_A\}\qquad u_B=\min\{x_B,\sqrt{y_B}\}$$ The endowments are \omega_A=(...