John and Belle consume only two goods, x and y. They have strictly convex preferences and no kinks in their indifference curves. At the initial endowment point, the ratio of John's marginal utility of x to his marginal utility of y is J and the ratio of Belle's marginal utility of x to her marginal utility of y is B, where J < B. The competitive equilibrium price ratio is px/py = C. Which of the following is true? a. C> B. b. C < J. c. C = J. d. C = B. e. ]

John and Belle consume only two goods, x and y. They have strictly convex preferences and no kinks in their indifference curves. At the initial endowment point, the ratio of John's marginal utility of x to his marginal utility of y is J and the ratio of Belle's marginal utility of x to her marginal utility of y is B, where J < B. The competitive equilibrium price ratio is px/py = C. Which of the following is true? a. C> B. b. C < J. c. C = J. d. C = B. e. ]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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