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Category > Economics Posted 22 Jun 2017 My Price 6.00

Question 2 6

Suppose there are two consumers. A and E. The utility functions of each consumer are given by: UAD'EM = KY3
Hail-{R} = 32"!
Therefore: II For consumer A: MU: = Y3; l‘w'liJarr = 3“:
I For consumer B: MUx = ‘1"; MU»,r = I The initial endowme nts a re: mx=1sw=2a
B:H=54;V=12 a] {20 points} Suppose the price of‘r', Pr = 1. Calculate the price of X, chat will lead to a competitive
equilibrium. hi {3 points} HowI much of each good does each consumer demand in equilibrium?
Consumer A's Demand for X: Consumer A's Demand for ‘1' Consumer B's demand for )1: Consumer B's demand for ‘1’ Ci {4 points} What is the marginal rate of substitution for consumer A at the competitive equilibrium?

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Status NEW Posted 22 Jun 2017 02:06 AM My Price 6.00

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