Solved

Colette and Hans Both Consume the Same Goods in a Pure

Question 64

Multiple Choice

Colette and Hans both consume the same goods in a pure exchange economy. Colette is originally endowed with 15 units of good 1 and 12 units of good 2. Hans is originally endowed with 97 units of good 1 and 4 units of good 2. They both have the utility function U(x1, x2) = Colette and Hans both consume the same goods in a pure exchange economy. Colette is originally endowed with 15 units of good 1 and 12 units of good 2. Hans is originally endowed with 97 units of good 1 and 4 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) $14 B) $28 C) $2 D) $1 E) $7 . If we let good 1 be the numeraire, so that p1 = $1, then what will be the equilibrium price of good 2?


A) $14
B) $28
C) $2
D) $1
E) $7

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q6: If an allocation is Pareto optimal and

Q35: Dan and Marilyn consume two goods, x

Q58: Mutt's utility function is U(m, j) =

Q59: In a pure exchange economy, Ollie's utility

Q60: Jack Spratt's utility function is U(F, L)

Q61: Adelino and Benito consume only two goods,

Q62: Jack Spratt's utility function is U(F, L)

Q63: An economy has two people, Charlie and

Q67: Astrid's utility function is U(H<sub>A</sub>, C<sub>A</sub>) =

Q68: Morris has the utility function U(b, w)