! Consider a two-good two agent economy with the following endowments and utility functions:(e, e) = (15, 0), (ef, e) = (0, 5)ut (x1,X2) = In x1 + 2 ln x2u (x1, x2) = 3 ln x1 + In x2.Find the equilibrium price of good 1 in this economy. Use the normalization p1 + p2 = 1. (Report t

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Answered: Consider a two-good two agent economy…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 4SQ

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Consider an exchange economy with two consumers (A and B) and two goods (x1 and x2). Consumer A has an endowment of 5 units of x1 and none of x2, whereas Consumer B has an endowment of 3 units of x1 and 15 units of x2. Consumer A's utility function is given by uA=xA1xA2, and Consumer B's utility function is given by uB=min{xB1,xB2}. Both goods are traded in competitive markets. Find the competitive equilibrium price for x2, assuming p1=1.
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Consider a two-good two agent economy with the following endowments and utility functions: (ef, e) = (15,0), (ef, e) = (0, 5) ut (x1,X2) = In x1 + 2 ln x2 uf (x1, x2) = 3 In x + In x2. %3D Find the equilibrium price of good 1 in this economy. Use the normalizationpi + p2 1. (Report