sschmittt Posts: 1, Reputation: 1 New Member #1 Dec 7, 2013, 02:59 AM
General equilibrium price (Microeconomics)
1. An economy has one firm with a production function q = 2L1/2, where L is labour. There are n consumers, equally sharing the ownership of the firm. Every consumer’s utility ui = citi, where ci is consumption and ti is time of leisure for I = 1, 2, n. Consumers’ wage rate w = 1. With 24 hours for work and leisure, a consumer has a budget constraint cip = di + 24 – ti where p is the price of consumption good and di is his dividend.

(1) Find the general equilibrium price as a function of n.
(2) How do each consumer’s consumption and working hours depend on n?

Thank youuuuu

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