Alberto's utility function is u(xã, YA) = min{¤Ã, YA}, where ï and yд are his consumptions of goods and y. Bella's utility function is u(XB,YB) = XBYB, where x and yß are her consumptions of goods and y. Alberto's endowment s 5 units of ï and no y. Bella's endowment is 11 units of y and no x. If x is the numeraire and p is the price of y in units of x, then in a competitive equilibrium
Alberto's utility function is u(xã, YA) = min{¤Ã, YA}, where ï and yд are his consumptions of goods and y. Bella's utility function is u(XB,YB) = XBYB, where x and yß are her consumptions of goods and y. Alberto's endowment s 5 units of ï and no y. Bella's endowment is 11 units of y and no x. If x is the numeraire and p is the price of y in units of x, then in a competitive equilibrium
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![A
and yд are his
= XBYB,
Alberto's utility function is u(xA, YA) = min{A, YA}, where
consumptions of goods and y. Bella's utility function is u(XB, YB)
where x³ and yß are her consumptions of goods and y. Alberto's endowment
is 5 units of x and no y. Bella's endowment is 11 units of y and no x. If x is the
numeraire and p is the price of y in units of x, then in a competitive equilibrium
○ 11/5 = p
11/(p+1) +2.5 = 11
O min{5, 11}+11/2p=11
O min{5, 11}+5/2p=11
○ 5/(p+1) +5.5 = 11](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F75cc0061-2122-4c08-9d22-4c32a98bc2e1%2Faa4c11ac-02b5-4a9f-bfad-a720382a8c15%2F3qoniwa5_processed.png&w=3840&q=75)
Transcribed Image Text:A
and yд are his
= XBYB,
Alberto's utility function is u(xA, YA) = min{A, YA}, where
consumptions of goods and y. Bella's utility function is u(XB, YB)
where x³ and yß are her consumptions of goods and y. Alberto's endowment
is 5 units of x and no y. Bella's endowment is 11 units of y and no x. If x is the
numeraire and p is the price of y in units of x, then in a competitive equilibrium
○ 11/5 = p
11/(p+1) +2.5 = 11
O min{5, 11}+11/2p=11
O min{5, 11}+5/2p=11
○ 5/(p+1) +5.5 = 11
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