Question
1. Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X,Y) = X*Y UB(X,Y) = X*Y3 Therefore:
1. Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X,Y) = X*Y UB(X,Y) = X*Y3 Therefore: For consumer A: MUX = Y; MUY = X For consumer B: MUX = Y3; MUY = 3XY2 The initial endowments are: A: X = 10; Y = 6 B: X = 14; Y = 19 a) (40 points) Suppose the price of Y, PY = 1. Calculate the price of X, PX that will lead to a competitive equilibrium.
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Managerial Economics And Financial Analysis
Authors: M.S. Bhat, A.V. Rau
1st Edition
9352300211, 978-9352300211
