For the next three questions, assume that there are two consumers in aneconomy that have utility functionsUA(2,3)=2¹/42/4U" (x,y)=1¹/2¹/2The two consumers begin with equal endowments of the two goods=== e = 5029. If the price of z and y were both set to 1, there would be(a) An excess demand for r so the equilibrium price ratio must be less than 1(b) An excess supply of r so the equilibrium price ratio must be less than 1(c) An excess demand for y so the equilibrium price ratio must be greater than 1(d) An excess supply of y so the equilibrium price ratio must be greater than 1(e) No excess supply or demand for either good, so the equilibrium price ratio is 130. What is the equilibrium price ratio?(a) 2/3(b) 5/2(c) 3/5(d) 1(e) None of these31. Consumer A increases his endowment of both goods to 100 (e = e = 100). This willcause(a) No change in the equilibrium price ratio(b) The equilibrium price ratio to increase, causing consumer B to decrease theirconsumption of z(c) The equilibrium price ratio to increase, causing consumer B to increase theirconsumption of z(d) The equilibrium price ratio to decrease, causing consumer B to increase theirconsumption of r(e) The equilibrium price ratio to decrease, causing consumer B to decrease theirconsumption of z

In a pure exchange economy, there are two consumers who have initial endowments of two goods. They…

For the next three questions, assume that there are two economy that have utility functions U (x,y)=2¹/21/2 The two consumers begin with equal endowments of the two goods 4 = 2 = 1 = 8 = 50 3. If the price of z and y were both set to 1, there would be tio must be less than 1

For the next three questions, assume that there are two economy that have utility functions U (x,y)=2¹/21/2 The two consumers begin with equal endowments of the two goods 4 = 2 = 1 = 8 = 50 3. If the price of z and y were both set to 1, there would be tio must be less than 1

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 6QFR

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