For the exchange economy with Agent endowment maximizing and Agent endowment maximizing : an example of a pair of competitive equilibrium prices for this economy is
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2 marks, −1MicroeconomicsGeneral equilibrium and exchange economiesCompetitive equilibrium in an exchange economyHardabout 3 min
DSE 2005 Question 3: General equilibrium and exchange economies
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For the exchange economy with Agent 1 endowment (100,100) maximizing min {x₁,y₁} and Agent 2 endowment (50,0) maximizing x₂+y₂: an example of a pair of competitive equilibrium prices (p₁,p₂) for this economy is (A) (1,0) (B) (0,1) (C) (1/3,2/3) (D) (2/3,1/3)
Also written as: For the exchange economy with Agent 1 endowment (100,100) maximizing min {x_1,y_1} and Agent 2 endowment (50,0) maximizing x_2+y_2: an example of a pair of competitive equilibrium prices (p_1,p_2) for this economy is
General equilibrium and exchange economies has come up 69 times in 7 exams since 2004.
What this question tests
This question is on Competitive equilibrium in an exchange economy, part of General equilibrium and exchange economies in Microeconomics.
Finding the prices at which every consumer's chosen bundle clears the market.
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