What is the marginal rate of substitution for consumer A at the competitive equilibrium?

/in /by

Suppose there are two consumers, A and B.

Suppose there are two consumers, A and B.

Question

NEED Done by 9:45am

Suppose there are two consumers, A and B.

The utility functions of each consumer are given by:

UA = X2Y

UB = X*Y

Therefore:

� Consumer A: MUX = 2XY; MUY = X2

� Consumer B: MUX = Y; MUY = X

The initial endowments are:

A: X = 120; Y =6

B: X = 30; Y =14

a) Suppose the price of good Y, Py=1. Calculate the price of good X, Px that will lead to a competitive equilibrium.

b) How much of each good does each consumer demand in equilibrium?

Consumer A�s Demand for X:

Consumer A�s Demand for Y:

Consumer B�s demand for X:

Consumer B�s demand for Y:

c) What is the marginal rate of substitution for consumer A at the competitive equilibrium?

Suppose there are two consumers, A and B.

 

PLACE THIS ORDER OR A SIMILAR ORDER WITH STUDENT HOMEWORKS TODAY AND GET AN AMAZING DISCOUNT

get-your-custom-paper

The post What is the marginal rate of substitution for consumer A at the competitive equilibrium? appeared first on STUDENT HOMEWORKS .

 
Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code “Newclient” for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.

Buy Custom Nursing Papers