Question
Chris and Dana live in an exchange economy with two goods: good Q and good R. Chris starts off with an endowment of 6 units
Chris and Dana live in an exchange economy with two goods: good Q and good R. Chris starts off with an endowment of 6 units of Q and 10 units of R. Dana starts off with an endowment of 8 units of Q and 8 units of R.
a) Suppose that the price of good R is pR=1 and the price of good Q is pQ=2. How much is Chris's initial income, given his endowments and given these prices? [Do not use any decimal places in your answer.]
b) How much is Dana's initial income, given her endowments and given these prices? [Do not use any decimal places in your answer.]
c) At these prices, how many units of Q would Chris want to consume? [Use up to two decimal places in your answer.]
d) At these prices, how many units of R would Chris want to consume? [Use up to two decimal places in your answer.]
e) At these prices, how many units of Q would Dana want to consume? [Use up to two decimal places in your answer.]
f) At these prices, how many units of R would Dana want to consume? [Use up to two decimal places in your answer.]
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