odecor good y) and one firm. Consumer 1 has only 10 units of good x as her endowment. Consumer 2 has 25 units of good y as her endowment. The firm produces good x by using good y. Its production function is x = 2√. Consumer 1 fully owns the firm. Consumer 1's utility function is given by U₁[1, 1] In ₁+In y₁. Consumer 2's utility function is given by U2[2, 32] = √√√2Y2. Let p be the price of good x and q the price of good y. Derive the general equilibrium. =
odecor good y) and one firm. Consumer 1 has only 10 units of good x as her endowment. Consumer 2 has 25 units of good y as her endowment. The firm produces good x by using good y. Its production function is x = 2√. Consumer 1 fully owns the firm. Consumer 1's utility function is given by U₁[1, 1] In ₁+In y₁. Consumer 2's utility function is given by U2[2, 32] = √√√2Y2. Let p be the price of good x and q the price of good y. Derive the general equilibrium. =
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Consider a two-good economy (good z and good y) with two consumers
and one firm. Consumer 1 has only 10 units of good x as her endowment.
Consumer 2 has 25 units of good y as her endowment. The firm produces
good x by using good y. Its production function is x = 2/y. Consumer 1
fully owns the firm. Consumer 1's utility function is given by U1[¤1, Yı] =
In x+ln y1. Consumer 2's utility function is given by U2[c2, Y2] = VT2Y2.
Let p be the price of good x and q the price of good y. Derive the general
equilibrium.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fad4ba00d-2c8c-4a40-9587-8f92dd61cb02%2Fc046212f-9520-4c6a-8616-3f0215fee39e%2F1kx0fz7_processed.png&w=3840&q=75)
Transcribed Image Text:Consider a two-good economy (good z and good y) with two consumers
and one firm. Consumer 1 has only 10 units of good x as her endowment.
Consumer 2 has 25 units of good y as her endowment. The firm produces
good x by using good y. Its production function is x = 2/y. Consumer 1
fully owns the firm. Consumer 1's utility function is given by U1[¤1, Yı] =
In x+ln y1. Consumer 2's utility function is given by U2[c2, Y2] = VT2Y2.
Let p be the price of good x and q the price of good y. Derive the general
equilibrium.
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