Question
Assume the first agent is endowed with 2 apples and 3 bananas. If the relative price of apples in terms of bananas P a /
Assume the first agent is endowed with 2 apples and 3 bananas. If the relative price of apples in terms of bananas Pa / Pb to be equal to 1, the consumption bundle will be (2A, 3B) in absence of trade. What does the consumption bundle in absence of trade look like if the relative price of apples in terms of bananas Pa / Pb is 0.5?
Please also draw the budget constraint line and point out the orginal endowment and slop?
Assume the first agent is endowed with 2 apples and 3 bananas. If the relative price of apples in terms of bananas Pa / Pb to be equal to 1, the consumption bundle will be (2A, 3B) in absence of trade. What does the consumption bundle in absence of trade look like if the relative price of apples in terms of bananas Pa / Pb is 0.5?
Please also draw the budget constraint line and point out the orginal endowment and slop?
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Get StartedRecommended Textbook for
Microeconomics
Authors: Paul Krugman, Robin Wells
3rd edition
978-1429283427, 1429283424, 978-1464104213, 1464104212, 978-1429283434
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