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A country (Home) is populated with workers who produce either food (F) or clothing (C). There are 200 workers producing food and 100 producing clothing

A country ("Home") is populated with workers who produce either food (F) or clothing (C). There are 200 workers producing food and 100 producing clothing - these numbers are fixed. Each food worker produces 6t unites of food and each clothing worker produces 3 units of clothing. Workers own the output they produce and can trade with one another. All workers share the same preferences over food and clothing represented by the utility function:

In autarky, how many units of food and clothing will be consumed by a clothing worker? By a food worker?

1/32/3 U (Dc, DF) = DD2/3 F

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DF DC 1500 1 MRS 2DF13DC23 MRS 2DC23DF13 DCDF 4DC DF Substituting in 1 DC 300 DF 1200 There also ... blur-text-image

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