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Tom and Jerry are living on an island. There are only two goods, berries and nuts. Tom's utility function is U(BT, NT) = BTNr, where
Tom and Jerry are living on an island. There are only two goods, berries and nuts. Tom's utility function is U(BT, NT) = BTNr, where Br and Nr are Tom's consumption of berries and nuts respectively. Jerry's utility function is U(BJ, NJ) = BJ + 2NJ, where By and NJ are Jerry's consumption of berries and nuts respectively. Tom is endowed with 5 units of berries and 13 units of nuts. Jerry is endowed with 6 units of berries and 8 units of nuts. Let berry be the numeraire, so that pp = $1. In a competitive equilibrium for this economy, what will be the equilibrium price of nuts? How many units of berries and nuts will Tom and Jerry each consume
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