Suppose costumer 1's endowment is (a₁, b₁ ) = (3, 7) and consumer 2's endowment is (a2, b2 ) = (7, 3). Consumer 1 has preferences u₁ (a₁, b₁) = a₁b₁, and consumer 2 has preferences u₂ (a2, b2) = a2b2. Which agent has the higher relative value for good a in terms of good b at the endowment? Consumer 1 values good a relatively more than consumer 2 Consumer 2 values good a relatively more than consumer 1 They value good a at the same relative value at the endowment

Suppose costumer 1's endowment is (a₁, b₁ ) = (3, 7) and consumer 2's endowment is (a2, b2 ) = (7, 3). Consumer 1 has preferences u₁ (a₁, b₁) = a₁b₁, and consumer 2 has preferences u₂ (a2, b2) = a2b2. Which agent has the higher relative value for good a in terms of good b at the endowment? Consumer 1 values good a relatively more than consumer 2 Consumer 2 values good a relatively more than consumer 1 They value good a at the same relative value at the endowment

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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