Points rationing. First read Chapter 2 and then return to this question. In the problem in [H.25], interpret a1 and a2 as money prices of the respective goods and b1 as money income; while c1 and c2...

Points rationing. First read Chapter 2 and then return to this question. In the problem in [H.25], interpret a1 and a2 as money prices of the respective goods and b1 as money income; while c1 and c2 are numbers of ration coupons which must also be paid per unit of each good and b2 is the consumer’s initial endowment of these ration coupons. f is a utility function. Give an economic interpretation of the problem and of the three solution possibilities shown in Fig. H.5. What would you expect to happen if some consumers are at a-type equilibria and others are at b-type equilibria?



May 26, 2022
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