The traders' utilities are the following u 1 (x 1, x 2 ) =x 1 2/3 x
Fantastic news! We've Found the answer you've been seeking!
Question:
The traders' utilities are the following u1(x1, x2) =x12/3 x21/3 and u2(x1, x2) =x11/3 x21/2. Their initial endowments are a1= (10,10) and a2= (20,5) . Traders come to a market and exchange commodities to maximize their utilities. Compute the price vector in equilibrium. Compare the utilities before and after the exchange.
Posted Date: