Aand yд are his= XBYB,Alberto's utility function is u(xA, YA) = min{A, YA}, whereconsumptions of goods and y. Bella's utility function is u(XB, YB)where x³ and yß are her consumptions of goods and y. Alberto's endowmentis 5 units of x and no y. Bella's endowment is 11 units of y and no x. If x is thenumeraire and p is the price of y in units of x, then in a competitive equilibrium○ 11/5 = p11/(p+1) +2.5 = 11O min{5, 11}+11/2p=11O min{5, 11}+5/2p=11○ 5/(p+1) +5.5 = 11

Consumer 1 u=min(xA,yA) px=1 py=p Budget Constrain : px.xA+py.yA=M M is the money income. xA+p.yA=M…

Alberto's utility function is u(xã, YA) = min{¤Ã, YA}, where ï and yд are his consumptions of goods and y. Bella's utility function is u(XB,YB) = XBYB, where x and yß are her consumptions of goods and y. Alberto's endowment s 5 units of ï and no y. Bella's endowment is 11 units of y and no x. If x is the numeraire and p is the price of y in units of x, then in a competitive equilibrium

Alberto's utility function is u(xã, YA) = min{¤Ã, YA}, where ï and yд are his consumptions of goods and y. Bella's utility function is u(XB,YB) = XBYB, where x and yß are her consumptions of goods and y. Alberto's endowment s 5 units of ï and no y. Bella's endowment is 11 units of y and no x. If x is the numeraire and p is the price of y in units of x, then in a competitive equilibrium

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.11P

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