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| Teaching Since: | Apr 2017 |
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| Questions Answered: | 12843 |
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MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
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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