Question: 5) Consider a two-Person general equilibrium with two agents A and 13 Agent A's utility function is ? UA ( xA , x 2 )

 5) Consider a two-Person general equilibrium with two agents A and
13 Agent A's utility function is ? UA ( xA , x

5) Consider a two-Person general equilibrium with two agents A and 13 Agent A's utility function is ? UA ( xA , x 2 ) = log ( xi ) + log ( x2 ) Agent B's utility function is: UB ( x 3 , x 13, ) = 2 log Xi + x 3 The endowments are: 2 ( Wi , WA ), ( WS, W 2 ) ; = E CI, 27, ( 1, 2)3 Denote the relative price by pro. 1 Find the demands of good I of Person At and B given an arbitrary relative p 2 . using the market clearing condition for good I, find the competitive equilibrium price p soive for the contract curve in terms of ( xi , x 2 )

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!