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MrGrimey MrGrimey
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6 years ago
Sarah and Andrew are two traders in a pure exchange economic with two goods, Bikes (B) and Computers (C). Sarah's preferences are described by the Cobb-Douglas Utility function:
   US = BS1/3CS2/3
Andrew's preferences are given by:
   UA = BA1/2CA1/2
Assume the price of Bikes is 1 and the price of computers is p. The initial endowments are BA = 10, BS = 20, CA = 20 and CS = 10. Solve for the competitive equilibrium prices (relative prices) and quantities.
Textbook 
Microeconomics: Theory and Applications with Calculus

Microeconomics: Theory and Applications with Calculus


Edition: 4th
Author:
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SaHiN22SaHiN22
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6 years ago
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3 years ago
Thank you
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