Consider a society consisting of just a farmer and a tailor. The farmer has 30 units of food but no clothing. The tailor has 60 units of clothing but no food. Suppose each has the utility function U-F3c. If the price of clothing is always $1, and the food price is currently $1, then we can conclude O the market is at a competitive equilibrium. the price of food will drop towards a cont"titive equilibrium. the price of food will increase towards a competitive equilibrium. None of the above.

Consider a society consisting of just a farmer and a tailor. The farmer has 30 units of food but no clothing. The tailor has 60 units of clothing but no food. Suppose each has the utility function U-F3c. If the price of clothing is always $1, and the food price is currently $1, then we can conclude O the market is at a competitive equilibrium. the price of food will drop towards a cont"titive equilibrium. the price of food will increase towards a competitive equilibrium. None of the above.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.2P

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