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General competitive equilibrium

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Reference no: EM131163494

Suppose an economy economy has two consumers, A and B, and two commodities X and Y.

A's utility function and initial endowment are:

UA( XA ,Y A)=X^1/3AYY^2/3a

ωA=(ωA X ,ωA Y )=(30, 20)

B's utility function and initial endowment are:

UB( XB ,YB)=X^1/2BY^1/2B

ωB=(ωB X ,ωBY )=(30, 180)

(a) What is A's Marshallian demand function for XA ?

(b) What is A's Marshallian demand function for Y A ?

(c) What is B's Marshallian demand function for XB ?

(d) What is B's Marshallian demand function for YB ?

(e) In the general competitive equilibrium, what is PX/PY?

(f) Find ( XA ,Y A , XB ,Y B ) in the general competitive equilibrium.

Hint: Please leave your answers as fractions, and do not attempt to convert them to decimals.

Please be careful at each step of your calculation.

Reference no: EM131163494

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