In an exchange economy, there are two people (A and B), and two goods (X and Y). The utility functions of A and B are given by UA(X,Y) = 3X4YA and UB(X,Y) XBYB. Person A starts with 15 units of X and 5 units of Y. Person B starts with 15 units of X and 10 units of Y. Which expression below gives you the equation for the contract curve in terms of person A's consumption? a. XA = 3YA b. XA = 2YA c. YA = 30XA d. XA = 20YA

In an exchange economy, there are two people (A and B), and two goods (X and Y). The utility functions of A and B are given by UA(X,Y) = 3X4YA and UB(X,Y) XBYB. Person A starts with 15 units of X and 5 units of Y. Person B starts with 15 units of X and 10 units of Y. Which expression below gives you the equation for the contract curve in terms of person A's consumption? a. XA = 3YA b. XA = 2YA c. YA = 30XA d. XA = 20YA

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.1P

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