Question: Consider an economy with two agents and two commodities. Consumers' preferences are represented by the following utility functions u1(x11,x21)=(x11)21(x21)21u2(x12,x22)=x12+x22 Consumers' initial endowments are e1=(10,2)e2=(6,4). Note:

Consider an economy with two agents and two commodities. Consumers' preferences are represented by the following utility functions u1(x11,x21)=(x11)21(x21)21u2(x12,x22)=x12+x22 Consumers' initial endowments are e1=(10,2)e2=(6,4). Note: You can normalize the price of one good to 1 at any point when solving this question. ) Derive the set of core allocations C(e). ) Explain why the equilibrium price of any good cannot be 0 . What property of consumer(s) utility function did you use in your explanation? Consider an economy with two agents and two commodities. Consumers' preferences are represented by the following utility functions u1(x11,x21)=(x11)21(x21)21u2(x12,x22)=x12+x22 Consumers' initial endowments are e1=(10,2)e2=(6,4). Note: You can normalize the price of one good to 1 at any point when solving this question. ) Derive the set of core allocations C(e). ) Explain why the equilibrium price of any good cannot be 0 . What property of consumer(s) utility function did you use in your explanation
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