Adrienne and Stephen consume pizza, Z, and cola, C. Adrienne's utility function is UA = ZACA and Stephen's is Us = (Zs) 0.5 (Cs) 0.5 Their endowments are ZA = 18, CA = 80, Zg = 2, and Cg = 40. What are the competitive equilibrium prices, where one price is normalized to equal one? Determine p, the competitive price of Z, where the price of C is normalized to equal one. The competitive price, p, is $ (Enter your response rounded to two decimal places.)

Adrienne and Stephen consume pizza, Z, and cola, C. Adrienne's utility function is UA = ZACA and Stephen's is Us = (Zs) 0.5 (Cs) 0.5 Their endowments are ZA = 18, CA = 80, Zg = 2, and Cg = 40. What are the competitive equilibrium prices, where one price is normalized to equal one? Determine p, the competitive price of Z, where the price of C is normalized to equal one. The competitive price, p, is $ (Enter your response rounded to two decimal places.)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.5P

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