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Consider a two-good, two-agent general equilibrium model represented by an Edgeworth box. Consumer 1 has preferences represented by a utility function U(r, y) = ry. In a competitive equilibrium this consumer receives a bundle (2,y) = (2, 4). What is a price pair for æ and y that satisfies the competitive equilibrium? %3D O P1,Py = 2 O P. = 2,P, 4

Consider a two-good, two-agent general equilibrium model represented by an Edgeworth box. Consumer 1 has preferences represented by a utility function U(r, y) = ry. In a competitive equilibrium this consumer receives a bundle (2,y) = (2, 4). What is a price pair for æ and y that satisfies the competitive equilibrium? %3D O P1,Py = 2 O P. = 2,P, 4

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider a two-good, two-agent general equilibrium model represented by an Edgeworth box. Consumer 1 has preferences represented by a utility function U(r, y) = ry. In a competitive equilibrium this consumer receives a bundle (2,v) = (2,4). What is a price pair for a and y that satisfies the competitive %3D equilibrium? O Pa = 1, Py = 2 O P = 2, P, = 4 O Pe = 2, Py 1 O Pr =4, Py 1 O No price pair among the options listed above satisfies the competitive equilibrium.
Transcribed Image Text:Consider a two-good, two-agent general equilibrium model represented by an Edgeworth box. Consumer 1 has preferences represented by a utility function U(r, y) = ry. In a competitive equilibrium this consumer receives a bundle (2,v) = (2,4). What is a price pair for a and y that satisfies the competitive %3D equilibrium? O Pa = 1, Py = 2 O P = 2, P, = 4 O Pe = 2, Py 1 O Pr =4, Py 1 O No price pair among the options listed above satisfies the competitive equilibrium.
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