Question 2. Suppose there are two consumers, A and B, and two goods, X and Y. The consumers have the following initial endowments and utility functions Consumer A: ● ● Consumer B: X=5 Y = 2 UA (X,Y)= MIN (2X,Y) ● X = 3 Y=6 UB (X,Y)= 3X + Y Suppose the Price of X is Px = $2, and the Price of Y is Py = $1. ●
Question 2. Suppose there are two consumers, A and B, and two goods, X and Y. The consumers have the following initial endowments and utility functions Consumer A: ● ● Consumer B: X=5 Y = 2 UA (X,Y)= MIN (2X,Y) ● X = 3 Y=6 UB (X,Y)= 3X + Y Suppose the Price of X is Px = $2, and the Price of Y is Py = $1. ●
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
ChapterE: Budget Constraint And Indifference Curve Analysis
Section: Chapter Questions
Problem 3QP
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I need help with this homework question on part b
![Question 2.
Suppose there are two consumers, A and B, and two goods, X and Y. The
consumers have the following initial endowments and utility functions
Consumer A:
●
●
X = 5
Y = 2
UA (X,Y)= MIN (2X,Y)
Consumer B:
X = 3
Y=6
UB (X,Y)= 3X + Y
Suppose the Price of X is Px = $2, and the Price of Y is Py = $1.
●](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0bfeb90e-22e6-4ede-a4eb-428bfbf3c4aa%2F24f5f5b9-86ec-4671-964e-b7501e31f96c%2Fdwcuhl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 2.
Suppose there are two consumers, A and B, and two goods, X and Y. The
consumers have the following initial endowments and utility functions
Consumer A:
●
●
X = 5
Y = 2
UA (X,Y)= MIN (2X,Y)
Consumer B:
X = 3
Y=6
UB (X,Y)= 3X + Y
Suppose the Price of X is Px = $2, and the Price of Y is Py = $1.
●
![b) For the situation above, determine for each market if there is excess demand, excess supply, or the
market is in equilibrium (circle the correct answer). If there is excess demand or excess supply,
determine how much it is.
Market for Good X:
Excess Demand =
Excess Supply:
The market is in equilibrium
Market for Good Y:
Excess Demand
Excess Supply:
=
The market is in equilibrium](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0bfeb90e-22e6-4ede-a4eb-428bfbf3c4aa%2F24f5f5b9-86ec-4671-964e-b7501e31f96c%2F2bnnxb5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:b) For the situation above, determine for each market if there is excess demand, excess supply, or the
market is in equilibrium (circle the correct answer). If there is excess demand or excess supply,
determine how much it is.
Market for Good X:
Excess Demand =
Excess Supply:
The market is in equilibrium
Market for Good Y:
Excess Demand
Excess Supply:
=
The market is in equilibrium
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