2(b)There are three people and two goods in an economy. The utility functions and the initial bundles aregiven below:U = X11X 12U2 = 2x 21+ X 22U3 = X 31 X 3z+X 32W; = (0,8)W;= (2,2)W3= (8,0)Suppose it is suggested that the three traders move to the allocation x given by x= (1,2), x2= (8, 4),X3= (1,4)C. Show that x is not in the core.

Given, Utility functions and the initial bundles are :U1=x11x12…

b)There are three people and two goods in an economy. The utility functions and the initial bundles are given below: U₁ = X11 X 12 U, = 2X zi* X22 U₂ = x 31 x 32+X 32 W₁ = (0,8) W>=(2,2) W=(8,0)

b)There are three people and two goods in an economy. The utility functions and the initial bundles are given below: U₁ = X11 X 12 U, = 2X zi* X22 U₂ = x 31 x 32+X 32 W₁ = (0,8) W>=(2,2) W=(8,0)

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2(b)There are three people and two goods in an economy. The utility functions and the initial bundles are
given below:
U = X11X 12
U2 = 2x 21+ X 22
U3 = X 31 X 3z+X 32
W; = (0,8)
W;= (2,2)
W3= (8,0)
Suppose it is suggested that the three traders move to the allocation x given by x= (1,2), x2= (8, 4),
X3= (1,4)
C. Show that x is not in the core.

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