Question 5 Consider a competitive exchange economy with two individuals (A and B) and two goods (x and y). Consumer A is initially endowed with 4 units of good x and 4 units of good y. Consumer A has the following demands for goods x and y: MA MA and TA YA 2px 2Py Consumer B is initially endowed with 16 units of good x and 1 unit of good y. Consumer B has the following demands for goods x and y: MB MB and ув IB = 2Pz 2py where mд is the market value of consumer A's endowment and mß is the market value of consumer B's endowment. At the resulting competitive equilibrium, what is the price of good x (with the price of good y normalised to 1)?

Question 5 Consider a competitive exchange economy with two individuals (A and B) and two goods (x and y). Consumer A is initially endowed with 4 units of good x and 4 units of good y. Consumer A has the following demands for goods x and y: MA MA and TA YA 2px 2Py Consumer B is initially endowed with 16 units of good x and 1 unit of good y. Consumer B has the following demands for goods x and y: MB MB and ув IB = 2Pz 2py where mд is the market value of consumer A's endowment and mß is the market value of consumer B's endowment. At the resulting competitive equilibrium, what is the price of good x (with the price of good y normalised to 1)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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