12. Consider a pure 2-consumer 2-good exchange economy under a competitive price system. Consumers' A and B preferences are represented by utility functions Consider a pure 2-consumer 2-good exchange economy under a competitive price system. Consumers' A and B preferences are represented by utility functions u(XIA,X2A)-XIA+2x2A. Up(Xin,X28)=X1nX28, and their initial endowments are wA-(2,0) and og (0,2), respectively. Then, a competitive equilibrium allocation is: a) (XIA,X2A)=(0,1), (x18,X2B) (1,1) b) (XIA,X2A)-(0,2), (XIB,X28)-(2,0) c) (XIA,X2a) (1,1), (XIB,X2n)-(0,1) d) (XIA,X2A) (1,1), (XIB,X2n)-(2,1) e) none of the previous statements a-d is correct.
12. Consider a pure 2-consumer 2-good exchange economy under a competitive price system. Consumers' A and B preferences are represented by utility functions Consider a pure 2-consumer 2-good exchange economy under a competitive price system. Consumers' A and B preferences are represented by utility functions u(XIA,X2A)-XIA+2x2A. Up(Xin,X28)=X1nX28, and their initial endowments are wA-(2,0) and og (0,2), respectively. Then, a competitive equilibrium allocation is: a) (XIA,X2A)=(0,1), (x18,X2B) (1,1) b) (XIA,X2A)-(0,2), (XIB,X28)-(2,0) c) (XIA,X2a) (1,1), (XIB,X2n)-(0,1) d) (XIA,X2A) (1,1), (XIB,X2n)-(2,1) e) none of the previous statements a-d is correct.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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![12. Consider a pure 2-consumer 2-good exchange economy under a competitive price system. Consumers' A and B
preferences are represented by utility functions Consider a pure 2-consumer 2-good exchange economy under a
competitive price system. Consumers' A and B preferences are represented by utility functions u(XI,X2A) XIA+2x2A,
UB(Xin,X28)=XIBX2s, and their initial endowments are oA-(2,0) and og (0,2), respectively. Then, a competitive
equilibrium allocation is:
a) (XIA,X2A)-(0,1), (XIB,X2B) (1,1)
b) (XIA,X2A)-(0,2), (XI,X2u)-(2,0)
c) (XIA,X2A)-(1,1), (Xm,X2n)-(0,1)
d) (XIA,X2A)-(1,1), (XIB,X28)=(2,1)
e) none of the previous statements a-d is correct.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc533429f-d6cd-4370-8355-17fb8d46b636%2F282651bb-96ac-4403-aede-61f859e7ffbc%2F3zomil_processed.jpeg&w=3840&q=75)
Transcribed Image Text:12. Consider a pure 2-consumer 2-good exchange economy under a competitive price system. Consumers' A and B
preferences are represented by utility functions Consider a pure 2-consumer 2-good exchange economy under a
competitive price system. Consumers' A and B preferences are represented by utility functions u(XI,X2A) XIA+2x2A,
UB(Xin,X28)=XIBX2s, and their initial endowments are oA-(2,0) and og (0,2), respectively. Then, a competitive
equilibrium allocation is:
a) (XIA,X2A)-(0,1), (XIB,X2B) (1,1)
b) (XIA,X2A)-(0,2), (XI,X2u)-(2,0)
c) (XIA,X2A)-(1,1), (Xm,X2n)-(0,1)
d) (XIA,X2A)-(1,1), (XIB,X28)=(2,1)
e) none of the previous statements a-d is correct.
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