Consider a two good economy that has two consumers, Anne and Bill. Anne enters the economy with endowment ea = (2, 9) and bill enters with endowment eb = (4, 4). Let Anne’s and Bill’s preferences be represented by the utility functions, ua (c1, c2) = c1^2c2 ub (c1, c2) = c1c2, where c1 is consumption of good 1 and c2 is consumption of good 2. We will first consider a market equilibrium where Anne and Bill exchange goods at prices p1 and p2 for goods 1 and 2, respectively. By Walras’ Law, we will normalize a price, so in the following set p2 = 1.

1. Relative to the allocation where Anne and Bill simply consume their respective endowments, (a, b) = (ea, eb), is the equilibrium allocation a Pareto improvement? That is, does the equilibrium allocation make at least one consumer better off without making anybody worse off?

2. What is the value of Anne’s endowment relative to that of Bill’s?

3. State all allocations (a, b) that are on the contract curve.

Asavings account that pays interest every 3 months is said to have a interest period

Who is better at multi-tasking? in business, employees are often asked to perform a complex task when their atten-tion is divided (i.e., multi-tasking). human factors (may 2014) published a study designed to determine whether video game players are better than non–video game play-ers at multi-tasking. each in a sample of 60 college stu-dents was classified as a video game player or a non-player. participants entered a street crossing simulator and were asked to cross a busy street at an unsigned intersec-tion. the simulator was designed to have cars traveling at various high rates of speed in both directions. during the crossing, the students also performed a memory task as a distraction. two variables were measured for each student: (1) a street crossing performance score (measured out of 100 points) and (2) a memory task score (measured out of 20 points). the researchers found no differences in either the street crossing performance or memory task score of video game players and non-gamers. “these results,” say the researchers, “suggest that action video game players [and non-gamers] are equally susceptible to the costs of dividing attention in a complex task”

Select the word from the list that best fits the definition sometimes