Suppose there are two consumers, A and B, and two goods, X, and Y. Consumer A's...

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Suppose there are two consumers, A and B, and two goods, X, and Y. Consumer A's...

Suppose there are two consumers, A and B, and two goods, X, and Y.

Consumer A's utility function is given by: Ua(X,Y) = X*Y^3

Consumer B's utility function is given by: Ub (X,Y) = X*Y

Marginal Utilities for A: MUx =Y^3 , MUy = 3X*Y^2

Marginal Utilities for B: MUx = Y, MUy = X

Initial endowments:

Person A has 40 units of good X and 20 units of good Y

Person B has 30 units of good x and 20 units of good Y

Suppose Py= 1

What is the value of Px that will result in competitive equilibrium?

How much of each good will each consumer demand in equilibrium?

business economics

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