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Teresa and Jean-Pierre Both Consume the Same Goods in a Pure

Question 39

Multiple Choice

Teresa and Jean-Pierre both consume the same goods in a pure exchange economy. Teresa is originally endowed with 9 units of good 1 and 6 units of good 2. Jean-Pierre is originally endowed with 91 units of good 1 and 14 units of good 2. They both have the utility function U(x1, x2) = Teresa and Jean-Pierre both consume the same goods in a pure exchange economy. Teresa is originally endowed with 9 units of good 1 and 6 units of good 2. Jean-Pierre is originally endowed with 91 units of good 1 and 14 units of good 2. They both have the utility function U(x<sub>1</sub>, x<sub>2</sub>) = . If we let good 1 be the numeraire, so that p<sub>1</sub> = $1, then what will be the equilibrium price of good 2? A) $10 B) $20 C) $2 D) $1 E) $5 . If we let good 1 be the numeraire, so that p1 = $1, then what will be the equilibrium price of good 2?


A) $10
B) $20
C) $2
D) $1
E) $5

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