Consider an exchange economy with two consumers: Charlotte and Dylan, and two goods: quinoa (Q) and raspberries (R). Charlotte has an initial endowment of 83.9 units of quinoa and 99.3raspberries. Dylan has 112.5 units of quinoa and 77.8 raspberries.Charlotte's utility function is given by Uc=Q¹/² R¹/², where Qc and Re are her consumption of Q and R, respectively. Dylan's utility function is given by Up-Q¹/³ R2/3, where Qp and Rp are hisconsumption of Q and R, respectively.Suppose that the market price of quinoa is po=2 and the market price of raspberries is pr=1.At these prices, how many units of Q would Dylan want to consume?

Here the initial endowment are used to calculate the income of the Dylan and this is the endowment…

Answered: Suppose that the market price of quinoa…

Suppose that the market price of quinoa is po=2 and the market price of raspberries is pr=1. At these prices, how many units of Q would Dylan want to consume?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider an exchange economy with two consumers: Charlotte and Dylan, and two goods: quinoa (Q) and raspberries (R). Charlotte has an initial endowment of 83.9 units of quinoa and 99.3
raspberries. Dylan has 112.5 units of quinoa and 77.8 raspberries.
Charlotte's utility function is given by Uc=Q¹/² R¹/², where Qc and Re are her consumption of Q and R, respectively. Dylan's utility function is given by Up-Q¹/³ R2/3, where Qp and Rp are his
consumption of Q and R, respectively.
Suppose that the market price of quinoa is po=2 and the market price of raspberries is pr=1.
At these prices, how many units of Q would Dylan want to consume?

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