Home country consume in the no-trade equilibrium

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Reference no: EM131425996

Suppose that Home and Foreign consumers have the same preferences over these two goods, and they are represented by the following utility function: U(Qc, Qw) = Qc ^1/3 Qw ^2/3

a. Graph the consumer budget line of the Home country and add indifference curves to the figure. Find the amount of cheese and wine that people in Home country consume in the no-trade equilibrium?

b. Graph the consumer budget line of the Foreign country and add indifference curves to the figure. Find the amount of cheese and wine that people in Foreign country consume in the no-trade equilibrium?

Reference no: EM131425996

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