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There are two consumers (A, B) with the following total utility functions (U) and endowments (W): UA (XA1, XA2) = (lnXA1) + (1 - )
There are two consumers (A, B) with the following total utility functions (U) and endowments (W):
UA (XA1, XA2) = (lnXA1) + (1 - ) lnXA2 with endowments W = (0, 1)
UB (XB1, XB2) = min (XB1, XB2) with endowments W = (1, 0)
Where Xij = consumption of commodity X by consumer i = A, B of commodity j = 1, 2
Calculate the market clearing prices and the equilibrium allocation of goods (X1 and X2).
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