Question
Assume that my utility function is u(x, y) := x 2 y, and that I have the bundle (5, 4). (A) Suppose that Tom offers
Assume that my utility function is u(x, y) := x 2 y, and that I have the bundle (5, 4).
(A) Suppose that Tom offers to give me 1.5 units of good y in exchange for 1 unit of good x. Should I do it?
(B) What is the smallest amount of good y that I would ever accept in exchange for 1 unit of good x?
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International Economics
Authors: Robert C. Feenstra, Alan M. Taylor
3rd edition
978-1429278515, 142927851X, 978-1319029517, 1319029515, 978-1429278447
