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Consider the pure exchange economy with 2 goods, good 1 and good 2, and two consumers, consumer A and consumer B.Each consumer is initially endowed
Consider the pure exchange economy with 2 goods, good 1 and good 2, and two consumers, consumer A and consumer B.Each consumer is initially endowed with 4 units of good 1 and 6 units of good 2.The consumers have the following Cobb-Douglas utility functions:
uA(x1A,x2A)=x1Ax2A
uB(x1B,x2B)=x1B2x2B2
Among the prices below, which ones could be Walrasian equilibrium prices?
a.
p1=2, p2=3
b.
p1=p2=1
c.
p1=3, p2=1
d.
None of the other answers
e.
p1=3, p2=2
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