Question: Carlos's utility function is u ( a , b ) = a + 2 b , where a is his consumption of artichokes and b

Carlos's utility function is
u(a,b)=a+2b,
where a is his consumption of artichokes and b is his consumption of broccoli.
Laura's utility function is
u(a,b)=min{a,2b}.
Laura initially has 60 artichokes and no broccoli. Carlos initially has 60 broccoli and no artichokes.
In this economy, in competitive equilibrium, the ratio of the price of artichokes to the price of broccoli must be (round to one decimal if necessary).

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!