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Cosider an Edgeworth -box economy, which contains two individuals i and i, and two good I and 2. The endowment of individual i is (
Cosider an Edgeworth -box economy, which contains two individuals i and i, and two good I and 2. The endowment of individual i is ( Wil, Wiz) = Cli3) and the endowment of individual j is (Wjl, Wiz) = (3,12, Individual i has the Leontief Utility Vicxin, Xiz) = min ( Xil, Xi2) for all Xil, Xizzo, while individual j has the Cobb- Douglas utility Up ( Xj l Xj z) = VXji Xiz for all X31, Xj2 20, which allocation below could be a competitive equilibrium with prices pi* = 1 and pat = 1 ? a . ( ( xit , XYZ ) , ( X j s , X j z ) ) = ( (3, 1), ( 1 13) ) b. ( C Xil , Xiz ) , ( X ji , x 3 2 ) ) = ( ( 212 ) , ( 2, 2 ) ), C . ( C X = 1 , X 7 2 ) , ( X 3 1 , X q 2 ) ) = ( (813 ), 413 ), (4/3, 8/ 3) ) d. None of the above
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