M7 Consider a two-good, two-agent general equilibrium model represented by anEdgeworth box. Consumer 1 has preferences represented by a utility functionU(r, y) = ry. In a competitive equilibrium this consumer receives a bundle(2,v) = (2,4). What is a price pair for a and y that satisfies the competitive%3Dequilibrium?O Pa = 1, Py = 2O P = 2, P, = 4O Pe = 2, Py 1O Pr =4, Py 1O No price pair among the options listed above satisfies the competitive equilibrium.

Competitive equilibrium satisfies the general equilibrium as well. P=MC is the condition for…

Consider a two-good, two-agent general equilibrium model represented by an Edgeworth box. Consumer 1 has preferences represented by a utility function U(r, y) = ry. In a competitive equilibrium this consumer receives a bundle (2,y) = (2, 4). What is a price pair for æ and y that satisfies the competitive equilibrium? %3D O P1,Py = 2 O P. = 2,P, 4

Consider a two-good, two-agent general equilibrium model represented by an Edgeworth box. Consumer 1 has preferences represented by a utility function U(r, y) = ry. In a competitive equilibrium this consumer receives a bundle (2,y) = (2, 4). What is a price pair for æ and y that satisfies the competitive equilibrium? %3D O P1,Py = 2 O P. = 2,P, 4

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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