Horst and Nigel live in different countries. Possibly they have different preferences, and certainly they face different prices. They each consume only two goods, x and y. Horst has to pay 14 marks per unit of x and 5 marks per unit of y. Horst spends his entire income of 167 marks on 8 units of x and 11 units of y. Good x costs Nigel 9 quid per unit and good y costs him 7 quid per unit. Nigel buys 10 units of x and 9 units of y.
(a) Which prices and income would Horst prefer, Nigel’s income and prices or his own, or is there too little information to tell? Explain your answer.
(b) Would Nigel prefer to have Horst’s income and prices or his own, or is there too little information to tell?