16.6 Suppose two individuals (Smith and Jones) each have 10 hours of labor to devote to producing either ice cream (X) or chicken soup (F). Smith's utility function is given by Us = X3Y 7

, whereas Jones' is given by Uj = X 5Y 5

.

The individuals do not care whether they produce X or Y, and the production function for each good is given by X=2L Y= 3L, where L is the total labor devoted to production of each good. Using this information,

a. What must the price ratio, PX/PY, be?

b. Given this price ratio, how much Xand Fwill Smith and Jones demand? (Hint: Set the wage equal to 1 here.)