In a Pure Exchange Economy, Ollie's Utility Function Is U(x

question 10

Essay

In a pure exchange economy, Ollie's utility function is U(x, y)= 3x + y and Fawn's utility function is U(x, y)= xy.Ollie's initial allocation is 1 x and no y's.Fawn's initial allocation is no x's and 2 y's.Draw an Edgeworth box for Fawn and Ollie.Put x on the horizontal axis and y on the vertical axis.Measure goods for Ollie from the lower left and goods for Fawn from the upper right.Mark the initial allocation with the letter W.The locus of Pareto optimal points consists of two line segments.Describe these line segments in words or formulas and show them on your graph.

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Definitions:

Voting Rights

Rights given to shareholders to vote on company matters, such as electing the board of directors, often proportional to the number of shares owned.

Company Charter

A legal document that establishes a corporation and defines its structure and purpose.

Right to Dividends

A shareholder's entitlement to receive a portion of a company's earnings, distributed as dividends, based on the number of shares held.

Dividend Per Share

A calculation of the total dividends declared by a company divided by the number of outstanding shares.