Question: 1. Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X, Y) = X*Y UB(X, Y) =

1. Suppose there are two consumers, A and B. The utility

1. Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X, Y) = X*Y UB(X, Y) = X*Y3 Therefore: For consumer A: MUx = Y; MUY = X For consumer B: MUx = Y3; MUY = 3XY2 The initial endowments are: A: X = 8; Y= 6 B: X = 14; Y = 17 a) (40 points) Suppose the price of Y, Py = 1. Calculate the price of X, Px that will lead to a competitive equilibrium. MacBook Pro

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