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) =
. 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
Correct Answer:
Verified
Q26: Sheila and Ivan live in an isolated
Q27: If an allocation is Pareto optimal and
Q34: Eduardo and Francisca participate in an economy
Q35: In a competitive pure exchange economy, if
Q36: A small economy has only two consumers,
Q37: Irene and Orville live in an isolated
Q41: Professor Nightsoils utility function is U N
Q42: Kens utility function is U(Q K, W
Q43: A small economy has only two consumers,
Q44: Abduls utility is U(X A, Y A
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents