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Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X,Y) = XY UB(X,Y) = X*y2 Therefore: .

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Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X,Y) = X"Y UB(X,Y) = X*y2 Therefore: . For consumer A: MUx = Y; MUy = X . For consumer B: MUx = Y2; MUy = 2XY The initial endowments are: A: X = 200; Y = 46 B: X = 40; Y = 26 a) (20 points) Suppose the price of Y, Py = 1. Calculate the price of X, Px that will lead to a competitive equilibrium

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