17.6 In Example 17.5 each individual has an initial endowment of 500 units of each good. a....

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17.6 In Example 17.5 each individual has an initial endowment of 500 units of each good.

a. Express the demand for Smith and Jones for goods X and Y as functions of PX and PY and their initial endowments.

b. Use the demand functions from part

(a) together with the observation that total demand for each good must be 1000 to calculate the equilibrium price ratio, PX/PY, in this situation. What are the equilibrium consumption levels of each good by each person?

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Microeconomic Theory Basic Principles And Extensions

ISBN: 9780324270860

9th Edition

Authors: Walter Nicholson

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Question Posted: Nov 12, 2024 04:00 AM

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17.6 In Example 17.5 each individual has an initial endowment of 500 units of each good. a....

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Microeconomic Theory Basic Principles And Extensions

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