Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X,Y) = X3*Y UB(X,Y) = X*Y Therefore: For consumer A: MUX = 3X2Y; MUY = X3 For consumer B: MUX = Y; MUY = X The initial endowments are: A: X = 30; Y = 90 B: X = 50; Y = 60 a) (16 points) Suppose the price of Y, PY = 1. Calculate the price of X, PX that will lead to a competitive equilibrium. b) (8 points) How much of each good does each consumer demand in equilibrium? Consumer As demand for X: Consumer As demand for Y: Consumer Bs demand for X: Consumer Bs demand for Y: c) (4 points) What is the marginal rate of substitution for consumer A at the competitive equilibrium?

Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X,Y)=X3YUB(X,Y)=XY Therefore: - For consumer A:MUX=3X2Y;MUY=X3 - For consumer B: MUX=Y;MUY=X The initial endowments are: A:X=30;Y=90 B:X=50;Y=60 a) (16 points) Suppose the price of Y,PY=1. Calculate the price of X,PX that will lead to a competitive equilibrium. b) (8 points) How much of each good does each consumer demand in equilibrium? Consumer A's demand for X: Consumer A's demand for Y: Consumer B's demand for X : Consumer B's demand for Y: c) (4 points) What is the marginal rate of substitution for consumer A at the competitive equilibrium? Note: You will upload this work, along with all the other questions, at the end of the exam. Enter the word "Finished" into the text-box below when ready to move on. Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X,Y)=X3YUB(X,Y)=XY Therefore: - For consumer A:MUX=3X2Y;MUY=X3 - For consumer B: MUX=Y;MUY=X The initial endowments are: A:X=30;Y=90 B:X=50;Y=60 a) (16 points) Suppose the price of Y,PY=1. Calculate the price of X,PX that will lead to a competitive equilibrium. b) (8 points) How much of each good does each consumer demand in equilibrium? Consumer A's demand for X: Consumer A's demand for Y: Consumer B's demand for X : Consumer B's demand for Y: c) (4 points) What is the marginal rate of substitution for consumer A at the competitive equilibrium? Note: You will upload this work, along with all the other questions, at the end of the exam. Enter the word "Finished" into the text-box below when ready to move on