10. Consider a two-person, two-commodity, pure-exchange, competitive economy. The consumers' utility functions are U = 911912 + 12q11 + 3q 12 U2 = and %3D = 921922 + 8q21 + 9922 respectively (where q;; denotes the consumption of commodity Q; by consumer i, with i = 1, 2 and j = 1, 2). Consumer 1 has initial endowments of 8 and 30 units of Q, and Q, respectively; consumer 2 has 10 units of each commodity. Determine the excess demand function for the two consumers. Determine an equilibrium price ratio for this economy.

10. Consider a two-person, two-commodity, pure-exchange, competitive economy. The consumers' utility functions are U = 911912 + 12q11 + 3q 12 U2 = and %3D = 921922 + 8q21 + 9922 respectively (where q;; denotes the consumption of commodity Q; by consumer i, with i = 1, 2 and j = 1, 2). Consumer 1 has initial endowments of 8 and 30 units of Q, and Q, respectively; consumer 2 has 10 units of each commodity. Determine the excess demand function for the two consumers. Determine an equilibrium price ratio for this economy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

10. Сonsider
two-person,
two-commodity,
pure-exchange, competitive economy. The. consumers'
utility functions are U, = q1¶12 + 12q11 + 39 12 and
U2
+ 9422 respectively (where q;
= 921922 + 8q21
denotes the consumption of commodity Q; by consumer
i, with i = 1, 2 and j = 1, 2). Consumer 1 has initial
endowments of 8 and 30 units of Q, and Q2
3D
%3D
respectively; consumer 2 has 10 units of each
commodity.
Determine the excess demand function for the two
consumers. Determine an equilibrium price ratio for
this economy.

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