Suppose there are two consumers, A and B, and two goods, X and Y. Consumer A is given an initia endowment of 2 units of good X and 6 units of good Y. Consumer B is given an initial endowment of 6 units of good X and 2 units of good Y. Consumer A's utility function is given by: UA(XY) = X'Y, and consumer B's utility function is given by: Ug(X.Y) - MIN (2X, Y). If the prices are Px-1 and Py- 2, if each consumer sells her initial endowment and buys back her optimal bundle, then in the Market for Good X there is (Select) and in the Market for Good Y there is (Select)

Suppose there are two consumers, A and B, and two goods, X and Y. Consumer A is given an initia endowment of 2 units of good X and 6 units of good Y. Consumer B is given an initial endowment of 6 units of good X and 2 units of good Y. Consumer A's utility function is given by: UA(XY) = X'Y, and consumer B's utility function is given by: Ug(X.Y) - MIN (2X, Y). If the prices are Px-1 and Py- 2, if each consumer sells her initial endowment and buys back her optimal bundle, then in the Market for Good X there is (Select) and in the Market for Good Y there is (Select)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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