Question 4. Suppose there are two consumers, A and B, and two goods, X and Y. Consumer A is given an initial endowment of 5 units of good X and 9 units of good Y. Consumer B is given an initial endowment of 3 units of good X and 7 units of good Y. Consumer A's utility function is given by: UA(X,Y)=X¹2*Y¹2 And consumer B's utility function is given by UB(X,Y)=X³4X¹4 a) Suppose the price of good Y is equal to one. Calculate the price of good X that will lead to a competitive equilibrium.

Question 4. Suppose there are two consumers, A and B, and two goods, X and Y. Consumer A is given an initial endowment of 5 units of good X and 9 units of good Y. Consumer B is given an initial endowment of 3 units of good X and 7 units of good Y. Consumer A's utility function is given by: UA(X,Y)=X¹2*Y¹2 And consumer B's utility function is given by UB(X,Y)=X³4X¹4 a) Suppose the price of good Y is equal to one. Calculate the price of good X that will lead to a competitive equilibrium.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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