In an exchange economy, there are two people, A and B, and two goods, x and y. The utility functions of A and B are given by u=x;y; for i=A, B. Person A starts with 72.000 units of x and zero units of y. Person B starts with zero units of x and 8.000 units of y. If the price of good y is 1, what is the competitive equilibrium of good x?

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5. In an exchange economy, there are two people, A and B, and two goods, x and y. The utility functions
of A and B are given by u;=xy; for i=A, B. Person A starts with 72.000 units of x and zero units of y.
Person B starts with zero units of x and 8.000 units of y. If the price of good y is 1, what is the
competitive equilibrium of good x?
Transcribed Image Text:5. In an exchange economy, there are two people, A and B, and two goods, x and y. The utility functions of A and B are given by u;=xy; for i=A, B. Person A starts with 72.000 units of x and zero units of y. Person B starts with zero units of x and 8.000 units of y. If the price of good y is 1, what is the competitive equilibrium of good x?
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