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Consider a society consisting of just a farmer and a tailor. The farmer has 20 units of food but no clothing. The tailor has 30
Consider a society consisting of just a farmer and a tailor. The farmer has 20 units of food but no clothing. The tailor has 30 units of clothing but no food. Suppose each has the utility functionU=FC
U=FC, whereF
FandC
Care consumption amounts of food and clothing, respectively. The price of clothing is always $1. What is the competitive equilibrium price for food?
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