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Consider an economy with two consumers, A and B, and two goods, 1 and 2. The function of consumer A is given by U (x
Consider an economy with two consumers, A and B, and two goods, 1 and 2. The function of consumer A is given by U (x1a, x2a) = x1a + 2xa2and its initial allocation is (w1a, wa2) = (131, 81). The utility function of consumer B is given by U (x1b, x2b) = x1b + 9ln (x2b) and its initial allocation is (w1b, w2b) = (55,24).
Now consider that these consumers operate in a competitive market (i.e. they are price takers). Find the demand functions for goods 1 and 2 from consumers A and B
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